Friday, August 9, 2013

The Next Senator From California? Getting His Street Cred

I'm not really sure I want to post this, but if I don't, I will get a gazillion notes from readers sending me the link.

So, I will post the link for archival purposes, but I really don't have much to say about it. The article speaks for itself.

The Financial Post is reporting:
An anti-Keystone XL pipeline commercial funded by President Barack Obama supporter and hedge-fund billionaire Tom Steyer confirms what many Canadians have long suspected — American anti-oil activists have gone mad.
An anti-Keystone XL pipeline commercial funded by President Barack Obama supporter and hedge-fund billionaire Tom Steyer confirms what many Canadians have long suspected — American anti-oil activists have gone mad.
The real question folks should be asking is this: what does Tom Steyer hope to gain from this? The wikipedia entry probably provides as good an answer as any:
It was reported in January 2013 that Steyer might be named as a replacement for Energy Secretary Steven Chu or that he might run for Dianne Feinstein's Senate seat in 2019. Asked whether he would accept an appointment to be Energy Secretary, Steyer said yes.

Another Unintended Consequence Of ObamaCare

The more I learn about O'BamaCare, the less worried I am as an investor. This will all take care of itself. Already, the plan has been delayed a year for big corporations, and the individual mandate isn't even going to be enforced until 2015.

Now this.

The Weekly Standard is reporting:
The Associated Press reported yesterday that insurance companies "have already warned small business customers that premiums could rise 20 percent or more in 2014 under the Affordable Care Act," and some companies may respond by not paying for insurance coverage for their employees' family members.
I completely missed that one.

Small businesses may actually come out ahead on O'BamaCare by insuring the employee only, and not the employee's family. A healthy male, age 25 - 50, can probably be insured for about $500 a month, whereas a family can run as much as $2,000/month. Coverage for a healthy female, with no pregnancy coverage, could run about the same but with obstetrical coverage the rate would be significantly higher under the current system. Under O'BamaCare it's hard to say how it will play out.
But for small businesses having the employees' families covered by the O'BamaCare exchanges rather than by the business health program makes all kinds of sense. And with unemployment/employment being what it is, it is unlikely many employees will be able to vote with their feet.

Another Permit For Stockyard Creek

I find it incredibly how one little field east of Williston can be such a great field. I track the Stockyard oil field here, though there have been no updates in a long time.

The Madison wells in this field are still actively producing; their cumulative production has been updated. Some of these Madison wells are 25 years old young and continue to produce very nicely, especially considering these wells paid for themselves a long time ago.

What Are You Going To Do, Charge Me With Smoking? -- Basic Instinct

There is a classic scene in the movie "Basic Instinct," in which a murder suspect is being interviewed by several detectives "downtown." When the Sharon Stone character lights up a cigarette, she is reminded by a detective that smoking is not allowed in the interrogation room.

She asks: "What are you going to do, charge me with smoking?"

That was the first thing I thought of when journalists reported that the President spoke of a "sealed indictment."

"What is Eric Holder going to do, charge me with misspeaking?"

Nine (9) New Permits -- The Williston Basin, North Dakota, USA - Four Producing Wells Completed With High IPs

Active rigs: 184

Nine (9) new permits --
  • Operators: QEP (3), SM Energy (2), Mountain Divide, OXY USA, Petro-Hunt, Whiting
  • Fields: Stockyard Creek (Williams), Poe (McKenzie), Sanish (Mountrail), Grail (McKenzie), Little Knife (Billings), Fortune (Divide)
  • Comments: it's amazing how many wells they can put on that little Stockyard Creek field east of Williston; QEP has three more permits in the "Helis Grail"
Wells coming off the confidential list were posted earlier; see sidebar at the right.

Four (4) producing wells completed:
  • 24247, 2,966, BR, CCU Meriwether 14-19MBH, unitized spacing, Corral Creek, t7/13;
  • 22968, 2,129, BR, CCU Burner 21-26TFH, unitized spacing, Corral Creek, t7/13;
  • 24246, 2,164, BR, CCU Meriwether 14-19TFH, unitized spacing, Corral Creek, t7/13;
  • 22213, 1,732, WPX, George Evans 14-23HD, Van Hook, t7/13;

For The Archives: China Will Become World's Biggest Net Oil Importer In Three Months (Almost Two Years In Dog Lives)

Bloomberg is reporting:
China will surpass the U.S. by October to become the world’s biggest net oil importer on a monthly basis, the Energy Information Administration said.
Imports by the second-biggest oil-consuming country will reach 6.45 million barrels a day, surpassing the U.S.’s 6.23 million, the EIA, the Energy Department’s statistical arm, said in this week’s Short-Term Energy Outlook. On a yearly basis, China’s overseas purchases will surpass the U.S.’s next year.
And that's what I think drove the price of oil up today.

Frack Sand Storage And Transloading Faciltiy To Be Built "In" New Town

Press release:
Dakota Plains Holdings, and UNIMIN Corporationtoday jointly announced a frac sand storage and transloading facility to be built at the Pioneer Terminal in New Town (Mountrail County), North Dakota. 
The new facility will have a throughput capacity of approximately 750,000 tons per year.

Construction is now underway and operations are expected to commence by January 2014.

The new terminal will supply energy service companies with frac sands sourced directly from UNIMIN's newest and largest proppant production facility in Tunnel City, Wisconsin.  The fracturing sands will be transported on Canadian Pacific's rail network. 

Dakota Plains will provide a land lease to UNIMIN of up to 30 years, and Dakota Petroleum Transport Solutions, LLC, a joint venture in which Dakota Plains holds a 50% membership interest, will provide fee-based transloading services.  The facility will include 8,000 tons of fixed storage, twin high-speed truck loadouts, and track capacity for 70 loaded railcars.
So, my abbreviation for crude-oil-by-rail is CBR; I guess I have to add FSBR. Maybe for "symmetry" I will simply refer to it as SBR.

Several story lines are obvious, but that's all I'm going to say about this right now. 

Hundreds Of New Students Enrolling In Bismarck Schools

For newbies: Bismarck is spelled with a "c."

Bismarck is the state capital. It's where Lynn Helms, the Director, NDIC, lives. The city is outside of the Bakken.

KXNET is reporting:
Bismarck students start school in less than two weeks and once again hundreds of new kids are registering.
Last school year more than 400 new kids enrolled in the district.

So far 292 more students are enrolled for this school year compared to last year and 59 are waiting to register.
Superintendent Tamara Uselman says phones in the registration office have been ringing off the hook.
Let's see: 400 new students last year.

This year, 292 more students than last year + 59 more waiting to register = 351.  Getting close to another record, I guess.

Williston Wire

Headlines only, no links. It is easy to subscribe to The Williston Wire.

Williston job fair, October 3, 2013.

New sushi bar will open in downtown Williston, on East Broadway.

The first phase of Washington Townhomes was completed; groundbreaking for 32 more units; in Minot.

St Luke's Hospital in Crosby has secured more housing for hospital employees.

Bakken boosting business in Crosby -- Hardware Hank has doubled in size.

Grand Forks businesses cite growth due to the Bakken.  For newbies: Grand Forks is nowhere near the Bakken; it's on the eastern border, across the river from Minnesota (where the sand comes from. Sometimes. When not embargoed.)

Several other stories at The Williston Wire but they have been previously reported.

RINs And Ethanol Blends -- Platts

Platts is reporting.

For the archives to help me understand RINs.

The beginning of the article in case the link breaks:
In December 2012, economists at the University of Missouri published a paper entitled “A Question Worth Billions: Why Isn’t the Conventional RIN Price Higher”? In the paper, they puzzled over why the price of Renewable Identification Numbers (RINs), used to prove compliance with the Renewable Fuel Standard (RFS), was only 5 cents, even though it was eviden tthat the so-called “blend wall” (the point at which the mandated volumes of ethanol exceed the roughly 10 percent of total gasoline consumption that our fuel infrastructure can accommodate) would need to drive RIN prices higher to incentivize the build-out of infrastructure capable of accommodating higher ethanol blends. They speculated perhaps it was because the market expected EPA to waive the broad mandates if RIN prices were to rise sharply.
Hold that paper up to a mirror and reverse it, and that’s where the market stands today. The question right now is why RIN prices are not lower. And based on various analyst reports this week, a key part of the reason seems to be broad-based skepticism in the market that EPA will use its waiver authority to avoid the blend wall—even though EPA just went to unusual lengths to signal precisely that it will.
On Tuesday, EPA announced that it would keep the 2013 biofuel targets roughly in place.Significantly, however, EPA stated unambiguously that it understands the RFS will become unworkable next year and that it expects to lower the 2014 volume requirements, including advanced biofuel and total renewable categories.

Don't Watch This Video -- Sponsored By Chevron

Chevron, or someone for Chevron, twittered that the company is reviving 100-year-old oil fields in California.

For the past couple of summers, while visiting southern California, I have noted that pumpers that used to be still (as in "not moving") were now operating, and a lot more work-over rigs were noted. This was along the coast south of San Pedro, headed down to Huntington Beach. I did not know the name of this oil field, so I googled: what is the name of the oil field south of Los Angeles toward Huntington Beach.

The answer: Huntington Beach oil field.


Anyway, I digress.

The Huntington Beach oil field is a rather far distance from the Kern River oil field, in-land, and northwest of Los Angeles. But that was the oil field that was mentioned in the tweet. Apparently, Chevron is reviving these 100-year-old fields using steam. I have not watched the entire video yet.

I assume steam is environmentally safe but I don't know. I'm sure the activist environmental wackos can find some problem with steam (steam is that stuff one sees when one boils water on one's stove in one's kitchen; the same thing that one sees coming out of those huge nuclear reactors). But I digress.

Anyway, here's the video. Kind of neat, I guess. Maybe not the technology, but just the fact that 100-year-old fields are being revived.

Guess how they can make the steam? Using solar energy!

Reviving the Kern River oil field with steam, sponsored by Chevron

It's The Video Games

The Los Angeles Times is reporting that California officials are flummoxed.

Student scores drop for first time in decade. [My one comment in brackets.]
For the first time in a decade, California standardized test scores in English and math slipped this year, flummoxing educators who blame budget cuts and new national learning standards that have required curriculum changes.
Despite the statewide slip in scores, released Thursday, Los Angeles Unified School District largely held its own: Students posted the highest gain in math among 10 large urban school districts and a smaller drop in English than statewide peers.
Scores rose particularly in two grades — sixth and ninth — that have adopted new academic learning standards, even as some educators pointed to them for the statewide decline. [LOL]
Overall, the percentage of students at grade level in English slipped to 56.4%, from 57.2%, and in math to 51.2%, from 51.5%. Achievement in both subjects had steadily improved since 2004, when only about a third of students performed at grade level.
The uncertainty surrounding the annual scores underscored the dicey nature of predicting student test performance or placing too much stock in year-to-year changes, experts said. Some said it could have been a statistical anomaly.
"It's very counterintuitive," L.A. Unified Supt. John Deasy said of the state decline. "I don't know how to make sense of it."
Note, again: scores rose for those groups that adhered to the new teaching standards. Who wudda thought?

Yes, it is a mystery. Girl.

It's a Mystery Girl, Roy Orbison

What Cable Customers Are Missing On CBS News

I understand that Time Warner Cable has removed CBS from its major markets, such as Los Angeles and New York City.

For those who may be missing CBS news here is an example of what is being reported: some restaurants are "banning" children after 7:00 p.m.
In response to the age-old headache of tiny temper tantrums La Fisheria, a Mexican restaurant in Houston, has instituted a “no customers under 8 after 7 p.m.” policy. 
What do patrons think?
Others said that the policy punishes parents.
“It would definitely limit our options,” Erin Davidson said. “We need to get out of the house.”
Okay, so one restaurant in Houston has this new rule and Erin is upset: it would definitely limit our options. We need to get out of the house.

LOL. I can't make this stuff up.

Somehow, dropping CBS from Time Warner Cable may not be such a bad idea. 

Note: there are more than 11,000 restaurants in Houston. One bans children under the age of 8 after 7. A better rule:
  • no one under 6 after 6
  • no one under 7 after 7
  • no one under 8 after 8
  • no one under 9 after 9
Hollywood child actors excepted. 

School Expansion For Marmarth, North Dakota

For newbies: Marmarth is spelled with two "r's."

For newbies: the population of Marmarth is 136 with 18 elementary students and is about as far away from the Bakken and still be located in west of the Missouri in North Dakota.

In other words, this linked article below shows just how far the Bakken is affecting even the smallest communities in western North Dakota. The linked article below doesn't mention the oil industry or the Bakken but I assume the dots all connect. I could be wrong. The little town may be growing for other reasons.

The Bismarck Tribune is reporting:
A tiny school out on the western edge is about to take a big bite, but not more than it can chew and swallow.
After decades of flying the "small is beautiful" flag, the Marmarth School Board voted Tuesday to spend nearly $1 million to add onto a structure built in the mid-'60s.
School board president Amber Battest said the school board did a lot of scratching and figuring and admits it does seem a bit much for a town of 136 people and 18 students expected to enroll this fall.
Marmarth is located in the southwest corner of North Dakota, about 100 miles from Dickinson, taking the meandering route of a coyote.

The construction project awarded to a South Dakota company; $895,900. It should be completed and ready for use by the fall of 2014.

This is the best part:
Kathy Walser, is the Slope County Superintendent of Schools, and one of her duties is serving as superintendent for the Marmarth school because it's what's called a "graded" elementary school unattached to a high school.
By law, she's only required to be at the school two times a year, but she travels there weekly from her rural Rhame ranch, occasionally subbing, but more often to provide administrative oversight.
"I like to come more often to get to know the kids," she said.
She doesn't take up much room. "I have a little corner. This year it will be in the library. Before, I was in with the art and para-professionals," she said.
This is a great story; go to the linked article for more.

To Buy A Car In China: Buy A Lottery Ticket For $13,400


Later, 11:39 CDT: a reader tells me --
Original Post

Some Chinese dots to connect:
Some data points:
  • several Chinese cities are proposing license-plate lotteries as a way to limit the number of cars on the road
  • Shanghai: one of four major Chinese cities that auctions opportunity to buy a car; 10,000 tickets auctioned monthly
  • Lottery tickets cost $13,400 if one wants to buy a second car
  • road density in China: "every kilometer of road in China has about 200 cars, as many as in Los Angeles, which has some of the worse traffic in the US." [The distinction for the worst traffic in the US is held by Atlanta and/or Houston.] Note: the density is not just for the major metropolitan areas in China; it is averaged out for the entire country. One can imagine the density in the big cities.
Two days ago, on August 7, 2013, I posted my musings on electric vehicles. The story about the Chinese luxury automobile in the WSJ linked above supports my conclusions, and was worth the price of a subscription to The Million Dollar Way.

The WSJ article linked above about the luxury car market in China is a must-read.

One thing the article does not mention is the average distance the average Chinese drives in one day. My hunch is these guys are not taking road trips to Tibet. These are well-to-do businessmen driving 20 or 30 miles to work and back each day. And if they are paying $13,400 for a lottery ticket they aren't going to put their license tag on a $20,000 Honda Civic. (For all kinds of reasons, not least of which the Chinese hate the Japanese, but I digress.) A luxury EV makes sense. And the Chinese are used to smaller cars which all EVs are, at least to date.

Think about that. The lottery ticket costs $13,400. The article is not clear on exactly how the lotter works. Here's the one paragraph on the specifics of the lottery:
In Shanghai, one of four major Chinese cities with policies designed to reduce car purchases to ease pollution and traffic congestion, between 9,000 and 10,000 plates are auctioned monthly, fetching an average of 82,000 yuan ($13,400) so far this year.
I interpret that to mean a lottery ticket costs $13,4000, which, if it is like an American lottery ticket, you pay your money whether you win or lose.  But regardless of how it works, rich businessmen are not paying $13,400 for a license tag on a cheap car.

Can you imagine how busy gasoline service stations are in China? My hunch is they don't have four gasoline stations on every corner like they do in Los Angeles. My hunch is these rich businessmen will be thrilled to charge their cars overnight in their high-rise apartment garages and call it a day.

GM is huge in China. GM won't sell many Cadillac ELR's in the US -- at least not at first, but there may be some opportunities in China.