Wednesday, November 13, 2013

Three Energy Hot Spots For The United States Worth Watching In 2014: GOM Oil; Alaska LNG; US Exporting LNG

Rigzone is reporting:
  • Gulf of Mexico, oil
  • Alaska converting its gas into LNG
  • America exports LGN
Gulf of Mexico Oil
"This area has totally rebounded from the Macondo disaster and companies are marching full speed ahead," commented Ernst & Young Strategic Analyst for Oil & Gas Foster Mellen to Rigzone. "The GOM will always be an important play due to the sheer volume of resources that it holds." Several fields are slated to come online in the near future further increasing production levels to new heights in 2014 with an average output of 1.45 million barrels per day expected by this time next year.
Alaska converting its gas into LNG
ExxonMobil Corp., ConocoPhillips, BP and TransCanada Corp. have joined forces to commercialize the North Slope gas. This project, Alaska LNG, has aligned a structure and transparent approach with the aim to commercialize North Slope's natural gas.
"Alaska is getting very busy and is quite an exciting area right now, so much so that we are looking into opening an office in that area next year," Dane Groeneveld, regional director of North America at NES Global Talent, told Rigzone. "This area will be in need of manpower as the project comes further along." "From a conventional oil perspective, Alaska is in a terminal decline," added Mellen. "However, Alaska has a lot of gas and this project is worthwhile. It makes a lot of economic sense to export it."
America exports LNG
Cheniere Energy Inc.'s Sabine Pass LNG project, the first liquefied natural gas project in North America given the OK to export, is slated to begin producing in late 2015. The project is on schedule with its first two processing units, the company announced in May 2013. Cheniere also made a final investment decision for the development and construction of Trains 3 and 4 of the Sabine Pass Liquefaction project. 
Much more at the linked article, four internet pages long. 

The Irony Of It All -- North Dakota Will Lose More Grassland, More Wetlands To Ethanol Than To The Oil And Gas Industry

Related post: EPA is ready to cut back on corn-ethanol mandate for 2014, taking it back to 2012 level

The Bismarck Tribune is reporting:
In the period from 2006 to 2011, North Dakota has had a net loss of about 220,000 acres of grasslands that have been converted into corn and soybean fields. 
That’s according to Christopher Wright of the Geographic Information Science Center of Excellence at South Dakota State University. Wright, who along with Michael Wimberly, authored a scientific paper on land use changes in the western Corn Belt of the U.S., spoke to group of conservation scientists Wednesday at the Ducks Unlimited regional headquarters in Bismarck.
Wright’s presentation was timely as the national debate continues over the effectiveness of the ethanol program aimed at reducing greenhouse gases.
Wright told the group that land conversion from grasslands to corn and soybeans, spurred by demands for biofuel stocks made from the crops, may take decades to reverse in terms of carbon once locked into the soil that has been released into the atmosphere.
Remember: only parts of four or five or six counties in northwestern North Dakota and a couple in southwestern North Dakota are affected directly by the oil and gas industry. Almost the entire state is affected by farming, in comparison. And farmers are making a lot of money off ethanol.
And with an ever-increasing number of slicers and dicers killing bats, eagles, hawks, and whooping cranes, the oil and gas industry is starting to look like an oasis of common sense.

Apparently The Daily Activity Report Won't Be Posted This Evening; Widening Brent/WTI Rewards CBR; Dakota Plains Pioneer CBR Expansion Nearing Completion; Also Builing In-Bound Materials (Frack Sand) Terminal At Same Location

Active rigs: 183

Two data points from EIA:
  • US crude oil production averaged 7.7 mil b/d in Oct, exceeding crude oil imports for 1st time since Feb '95.
  • US 2014 crude oil output to rise to 8.49 mil b/d, according to EIA. 
Update On Dakota Plains Pioneer CBR, Newtown, North Dakota
Platts is reporting: Dakota Plains' CBR in Newtown, ND, expansion nearing completion.
An expansion of Dakota Plains Holdings' Pioneer crude-by-rail terminal in Newtown, North Dakota, is expected to be completed in mid-December as the company gears up to rebound throughput volumes from low levels experienced during the summer, executives said Tuesday.

"We've been through a couple of challenging quarters, while the spreads worked against us," CEO Craig McKenzie said Tuesday during a quarterly earnings call. "Our focus this year has been to prepare for 2014 and beyond. 2013 has been a build-out year."

The Pioneer Terminal, he said, is a flagship in the Bakken Shale.
In addition to this there is a lot more information at the link, including:
The 30,000 b/d terminal's volumes and profit margins suffered as a result of the narrowing of the benchmark spread between Brent and West Texas Intermediate. A wide Brent/WTI spread, a key indicator of netbacks for moving crude around the US, allows for healthy profit margins for the crude-by-rail shipments.

McKenzie explained Tuesday that sending crude by rail from the Bakken becomes profitable on average when the spread is wider than $7/b. If the spread narrows to below that level, pipelines are sometimes preferred, McKenzie said.

"The Brent to WTI spread worsened early in the third quarter," McKenzie said in an earnings statement. "With our marketing operating margin reduced, we chose with our joint venture partner to limit the throughput volumes in July and August that affected both our transloading and marketing financial results for the quarter."

During the fourth quarter, the company expects throughput volumes to reach about 27,000 b/d, the highest number in three quarters, McKenzie said. After the expansion in December, the terminal's throughput could reach into the low 40,000 b/d range, he said.

The expansion will increase the terminal's capacity to 80,000 b/d, Mackenzie said in a statement released in October.

In addition, Dakota Plains is developing an inbound oilfields products business at the terminal, including a $15 million frac sand -- sand used in hydraulic fracturing -- facility scheduled for completion in May 2014.
Rail derailments could enter Keystone XL debates

The recent CBR derailments/spills could give President Obama the top cover he needs to approve the Keystone XL; he could use the opportunity to impose stricter pipeline rules in exchange for approving the pipeline; he could suggest an ObamaCare-like website exchange that pipeline companies must use during "open season."

The Oil & Gas Journal is reporting:
Some US officials raised greenhouse gas concerns as increasing amounts of Alberta’s heavy crude oil move by rail while approval of the Keystone XL pipeline’s cross-border permit continues to be delayed, Premier Allison Redford said after concluding her fifth Washington visit to lobby for the project.
“A lot of that product is being transported by rail at the moment, and that is something that is receiving quite a bit of attention in the United States, partly because we know that transportation by rail leads to higher greenhouse gas emissions than a pipeline would,” The Financial Post reported Redford as saying.
The premier met with officials at the US Department of State, which is expected to conclude its environmental impact statement early in 2014 on TransCanada Corp.’s revised application for a cross-border permit, as well as US Senate and House leaders.
The proposed 1,179-mile pipeline would move diluted bitumen from Alberta’s oil sands to US Gulf Coast refineries for processing. It also would provide capacity to transport lighter crude from the Bakken shale in North Dakota and Montana.

The Usual Suspects; Poll: Who Do You Trust More With Reporting The ObamaCare Enrollment Numbers? Republicans In Congress Trusted Twice As Much As Democrats In Congress

From Breitbart, the ten most responsible for this debacle, in reverse order, the usual suspects:
  • SEN. MARY LANDRIEU (D-LA): “If you like the insurance that you have, you'll be able to keep it.” (MSNBC’s Hardball, 12/16/09)
  • SEN. KAY HAGAN (D-NC): “We need to support the private insurance industry so that people who have insurance they're happy with can keep it while also providing a backstop option for people without access to affordable coverage.” (“Republicans Vent As Other Compromise Plans Get Aired,” National Journal’s Congress Daily, 6/18/09)
    SEN. MARK BEGICH (D-AK): “If you got a doctor now, you got a medical professional you want, you get to keep that. If you have an insurance program or a health care policy you want of ideas, make sure you keep it. That you can keep who you want.”
  • SEN. MICHAEL BENNET (D-CO): “We should begin with a basic principle: if you have coverage and you like it, you can keep it. If you have your doctor, and you like him or her, you should be able to keep them as well. We will not take that choice away from you.”
  • SEN. PATTY MURRAY (D-WA): “Again, if you like what you have, you will be able to keep it. Let me say this again: If you like what you have, when our legislation is passed and signed by the President, you will be able to keep it.” (Sen. Murray, Congressional Record, S.6400, 6/10/09)
  • SEN. TOM HARKIN (D-IA): “One of the things we put in the health care bill when we designed it was the protection for consumers to keep the plan they have if they like it; thus, the term ‘grandfathered plans.’ If you have a plan you like --existing policies--you can keep them. …we said, if you like a plan, you get to keep it, and you can grandfather it in.” (Sen. Harkin, Congressional Record, S.7675-6, 9/29/10)
  • SEN. CHUCK SCHUMER (D-NY): “If you like your insurance, you keep it.” (U.S. Senate, Finance Committee, Bill Mark-Up, 9/24/09)
  • SEN. DICK DURBIN (D-IL): “This bill before us on the Senate floor makes it clear that if you have an insurance policy that you like, you can keep it. If you like the doctor that you're currently doing business with, you can continue to use that doctor.” (Sen. Durbin, Teleconference, 12/4/09)
  • SEN. HARRY REID (D-NV):“In fact, one of our core principles is that if you like the health care you have, you can keep it.” (Sen. Reid, Congressional Record, S.8642, 8/3/09)
  • SEN. MAX BAUCUS (D-MT): “That is why one of the central promises of health care reform has been and is: If you like what you have, you can keep it. That is critically important. If a person has a plan, and he or she likes it, he or she can keep it.” (Sen. Baucus, Congressional Record, S.7676, 9/29/10)
 *************************************** is reporting (with a great graphic):
As you can see, almost twice as many people trust Fox than the President.
Notice, too, how little CBS, CNN, NBC, Administration officials, and Democrats in Congress are trusted.
Maybe it's because such folk were all behind the President pushing this program before it crashed before our very eyes.
In addition, Fox News Channel is killing the other networks in primetime and in the critical demographics (previously reported).

With regard to who do folks trust the most on ObamaCare numbers?
  • Fox News: 19
  • Friends and Family: 17
  • The President: 11
  • NPR: 10
  • Your insurance company: 9
  • Your local TV news: 6
  • Republicans in Congress: 4
  • MSNBC: 3
  • BBC News: 3
  • CNN: 3
  • CBS: 2
  • NBC: 2
  • Wall Street Journal: 2
  • Your local daily newspaper: 2
  • Obama spokespeople: 2
  • Democrats in Congress: 2

There was a headline that colleges are starting to cancel student health insurance. Why is that a headline? Why wouldn't they? Under ObamaCare children up to the age of 26 years of age must be carried on parents' insurance. There are two exceptions -- the health insurance program for President Obama and Congress; and the military health program, known as Tricare.


Why has almost no one signed for ObamaCare? Hint: it's not because of the webpage. Let's see if I can guess. I haven't read the article yet, just the headline. I suggest "sticker shock." MarketWatch is reporting their answer: procrastination.

I'm sure that's what Ms Sebelius is telling the president. Don't worry, sir. They are simply procrastinating. 

I don't consider "procrastination" a very good answer. Why are they procrastinating?

But if, maybe they should have given incentives to be early enrollees. 

CarpeDiem Back On The Sidebar; Find Median Income, College Graduation Rates In Your Locale

In an effort to clean-up/streamline the sidebar at the right, I removed a lot of links to my favorite other sites/blogs. CarpeDiem consistently has such good links, such good stories, such good comments, I added that link back to the sidebar.

This is incredible: click to this site, and locate median income/college graduation statistics for any zip code.

We're Starting To Hear/Read The Human Toll -- Wait Until The Employer Mandate Kicks In Next Year ... The Death Spiral

Breitbart is reporting: only 1 percent of those Massachusetts folks who had their policies canceled have been able to find new insurance. This has to be playing havoc with the entire health care industry, from those who are delivering care, to those who are trying to access health care. This is truly incredible. Folks come down with pneumonia daily; their kids break their bones; women become pregnant.

As I've said before, the GOP dodged a silver bullet when the Tea Party failed in efforts to defund ObamaCare. Or was it, the Tea Party dodged a silver bullet when the GOP failed in efforts to defund ObamaCare. Regardless, President Obama and his party now "own" ObamaCare. And what an incredible mess.

Each day, policies expire, and folks will continue receiving notices of cancellations through March 31, 2014. This is one of the few ObamaScare stories that has legs. This story is not going to go away.

Insurers are in deep, deep trouble. Think about it. They are losing millions of premium-paying customers, to be replaced by high-risk consumers of health care who will start racking up expensive as of January 1, 2014, and with NO lifetime medical caps. Once that $12,000 deductible is paid, the insurance companies have bought the entire risk. Yes, I know, the $12,000 deductible is an annual deductible.

But back to the Breitbart story. In case the link is broken, some key paragraphs:
There are too many rolling and coming catastrophes caused by ObamaCare to keep track of. Just wait until the employer market is hit late next year. But within a few weeks, a humanitarian crisis is about to hit millions who could find themselves without health insurance. Millions who had their insurance policies cancelled are now unable to re-insure themselves on the broken ObamaCare websites. 
In liberal Massachusetts alone, only 1% of those cancellations have re-enrolled. The Boston Herald reports that ObamaCare and the president's broken promise have already cost 150,000 Bay Staters their health insurance plans. But of those 150,0000, only 549 are in the Massachusetts Health Connector to be re-enrolled on time. Even that small number are not officially enrolled. 
Overall, only 47,781 total accounts have been created and a paltry 16,282 applications have been completed. What you likely have here is a toxic mix of people who either can't access the state site due to the technical problems, or those who have decided not to re-enroll. There is still 32 days to sign up in time, but it is obvious many are in no hurry
And then this:
On top of that, if a large portion of the millions who had their insurance cancelled simply refuse to re-enroll, you can bet that those refusing will be the young and healthy needed to keep ObamaCare financially viable. The result of an insurance pool filled with the sick and elderly would be skyrocketing premiums; which means more healthy people drop out, which mean prices go even higher.
That is called the death spiral
On October 21, 2013, I first used the phrase "Death Spiral" to describe what is going on with ObamaCare which is now AmericaCare.

North Dakota Adds To Its "All The Above" When It Comes To Energy; Largest Wind Project To Date Has Been Approved For North Dakota

The Bismarck Tribune is reporting:
A wind energy project that would be among the largest in North Dakota in terms of production capacity was given the green light Wednesday by the Public Service Commission.
Commissioners unanimously approved the 200.5 megawatt Courtenay Wind Farm. The $350 million project is being developed through Edina, Minn.-based Geronimo Energy.
Commission chairman Brian Kalk said the wind farm would be spread over a roughly 21,000-acre area in northeast Stutsman County.
Geronimo Energy is still considering whether they will utilize 1.5-megawatt or 2-megawatt turbines. The company told him recently it is leaning toward 2-megawatt wind turbines, Kalk said. This would put the number of turbines constructed at about 100.
North Dakota had approximately 1,672 megawatts of wind energy capacity in the state as of October of this year. An exact figure on how much of that capacity is being used wasn’t available.

So now that we've all agreed killing tens of thousands of bats, bald eagles, golden eagles, hawks, whooping cranes, California condors, it's nice to see that North Dakota is pushing its way to the top of the chart. I assume the gap between North Dakota and Minnesota will widen over time.

A Note To The Granddaughters

I continue to enjoy Freeman Dyson's Disturbing the Universe. Another excerpt, pp. 108 - 109:
At that time [during the London Blitz] in London, those of us who were seriously engaged in the war were very grateful to Wernher von Braun. 
We knew that each V-2 cost as much to produce as a high-performance fighter airplane. We knew that the German forces on the fighting fronts were in desperate need of airplanes, and that the V-2 rockets were doing us no military damage. From our point of view, the effect of the V-2 program was almost as good as if Hitler had adopted a policy of unilateral disarmament. Unilateral disarmament had certainly not been the intention of the military leaders who set up the Peenemunde organization.
This is an extreme example of the stupidities which often occur when bureaucracy takes control of scientific projects. Such stupidities are by no means an exclusively German phenomenon.
The global investment in renewable energy comes to mind.

"Nowhere Close" -- Michelle's WebPage

The FiscalTimes is reporting:
It’s even more discouraging since less than 50,000 people have signed up for health insurance through the federal exchange, according to unofficial estimates reported by the Wall Street Journal.
And it doesn’t appear to be getting better.
According to tech experts, the sorry state of the current website does little to inspire confidence that it can be fixed and functional in less than three weeks.
“When I visited on October first 1, that was the worst piece of software I’ve ever experienced in my life,” said Luke Chung, founder and CEO of the software company FMS. “It had nothing to do with too many users. It couldn’t serve one user.”
According to Sumit Nijhawan, CEO of Infogix, a data security firm working with private insurers, even if the White House can fix the problems associated with the site, they're going to find new ones immediately. Nijhawan also warned that the systems that allow CMS and health insurance companies to exchange information are no where close to being ready, meaning tech problems could last years.
Much, much more at the link. Meanwhile, one million Californians are getting notices that their insurance has been canceled. These are not the homeless, unemployed, urban youth; these are hardworking, middle Americans, blue collar, white collar, soccer moms, etc., who never thought they would be caught up in something so horrendous. 

Later in the article:
“I have contended all along that this is not that difficult of a project,” he said. “[The website] doesn’t provide health care, it doesn’t even provide insurance. It’s just a form to apply for a subsidy to get health insurance. It’s automating a paper form. It shouldn’t be that hard.”
“Technically, this is not that difficult,” Chung added. “It shouldn’t cost more than $10 million. And it should be something that can be done in a couple of months.”
According to both Chung and Nijhawan, even if the White House can build a functional web site by the end of the month, new problems would appear almost immediately.
This begs the question: what information was the government collecting on folks who enrolled? Since everyone has to have insurance, the government was using this exchange as a way to develop a database of private information on ALL Americans.

Regarding costs: this is what I'm hearing
  • original cost: $170 million
  • additional cost: $50 million
  • emergency surge: the tab is running
  • roll-out promotion: $700  million
That's a billion-dollar marketing program.  [Disclaimer: these cost estimates are based on very tenuous data; they could be off by .... millions. Don't quote me on them. HHS would have exact figures which they will eagerly provide if you ask nicely. LOL.]


~ Putting things in perspective ~
March 21st 2010 to 1 October 2013 is 3 years, 6 months, 10 days.
December 7, 1941 to May 8, 1945 is 3 years, 5 months, 1 day. 
What this means is that in the time we were attacked at Pearl Harbor to the day Germany surrendered is not enough time for this federal government to build a working webpage!
Mobilization of millions, building tens of thousands of tanks, planes, jeeps, subs, cruisers, destroyers, torpedoes, millions upon millions of guns, bombs, ammo, etc. Turning the tide in North Africa, Invading Italy, D-Day, Battle of the Bulge, Race to Berlin - all the while we were also fighting the Japanese in the Pacific!!! 
But Obama and his misadministration CAN'T BUILD A WEB PAGE!  ???...
Three and a half years and a billion dollars to get this "rolled-out"
and they are just now finding out that there are shortcomings in their system?
Government  contracts are normally advertised and granted to the lowest bidder with performance requirements.  This contract was not bid but awarded to Michelle’s classmate. 
Why wasn't Microsoft, Apple, or any number of other reputable web companies chosen?
Get ready for the excuses and remember what Ben Franklin once said,
"He that is good for making excuses is seldom good at anything else." 

Headline Stories Over At Yahoo!Finance At The Moment; Wow! Talk About A Whopper


Later, 10:41 CT:  in the headline story below, the writer mentioned "Continental Resources in the Permian." That's why I posted the qualifying comment. Don points out that CLR owns no acreage in the Permian.

Original Post

Five companies that will capitalize on the coming US oil boom.
Along that line, in the Bakken shale, he names Whiting Petroleum as a good candidate, as well as EOG Resources in the Eagle Ford shale and Continental Resources in the Permian Basin.
As for companies that will transport the oil to refiners, so-called "midstream suppliers" like MarkWest Energy and Targa Resources are Kiesel's top trades in this space. The companies are up a whopping 48% and 32% year to date, respectively.
CLR may be in the Permian Basin, but CLR is the "face of the Bakken." (see update that was posted above at 10:41, today; talk about a whopper of a mistake.) Repeating: CLR owns acreage in Oklahoma but right now, CLR is the "face of the Bakken." It really makes me wonder about these financial reporters getting such basic information wrong.


Yes, oil prices are being manipulated but not by whom you think
Ask most Americans and they'll tell you the oil markets are controlled by OPEC. But a recent lawsuit brought by four veteran floor traders alleges the global oil market is being manipulated from the waters off Scandinavia, not via the Middle East or Venezuela.


Oil will bottom at $90; this is not the time to short oil.
Oil prices have been falling Tuesday morning on news of resumed talks to curb Iran’s nuclear program. West Texas Intermediate (WTI) sweet crude fell below $95 a barrel by mid-morning.
Last night, however, it appeared that talks had stalled and both WTI and Brent oil closed higher.

"There were confusing signals coming from the Iran talks at the end of last week, and it's continuing to add volatility to oil markets,"...

Still, there is an overall sense of optimism that a deal will be made with Iran and crude oil supply will increase, says Dicker ....

Dicker expects oil prices to bottom at $90 per barrel.
“If this is the bearish model where we’re down to $95, that’s not so bearish," he notes." I’m not ready to throw in the towel and start shorting oil because that’s not a very cheap price... at least historically speaking."
One of thousands of talking heads.


And speaking of talking heads, this is all I need to know about the Tesla -- George Clooney is not happy with the one he used to own:
DETROIT (Reuters) - Tesla Motors Inc got more bad news this week following the third fire in its Model S electric sedan as actor George Clooney complained about being stuck on the side of the road in the Roadster sports car he used to own.
 Clooney, currently starring in the movie "Gravity", was asked by Esquire magazine in an interview that was posted online on Monday whether he owned a Tesla car.
 "I had a Tesla," Clooney told the magazine. "I was one of the first cats with a Tesla. I think I was, like, No. 5 on the list. But I'm telling you, I've been on the side of the road a while in that thing, and I said to them, ‘Look, guys, why am I always stuck on the side of the road? Make it work, one way or another.' "
Tesla discontinued the Roadster and currently only sells the Model S sedan. Clooney last year auctioned off his Roadster for charity for $99,000, according to media reports.
Last week, Tesla reported the third fire in the car in Tennessee. Police reports said the vehicle had run over a tow hitch that punctured the armour plating that protects the battery pack of lithium-ion cells. Despite no injuries in any of the accidents, the headlines about the fires have been unwelcome news for a company whose stock had risen sixfold in the first nine months of the year before the first fire occurred on October 1, 2013.

Richard Zeits Over At SeekingAlpha: Recent Million-Bbl EOG Wells May Re-Ignite Western Eagle Ford

Over at Seeking Alpha:
One of the most notable positive surprises during this earnings season in the Exploration and Production sector was the announcement by EOG Resources of uncharacteristically strong well results in the western portion of the Eagle Ford Shale play.
Very high oil productivity of certain areas in the eastern portion of the Eagle Ford has been widely publicized and confirmed by many "monster" well results, with some of the IPs exceeding 5,000 barrels of oil per day, plus significant amounts of associated liquids-rich gas. Those wells have largely defined the play's "core of the core" as a narrow band along the volatile oil and condensate windows, mostly in Gonzales and Karnes Counties (picture below). The western half of the play on the other hand, has lagged substantially in terms of well results, challenging operators to make competitive returns on their projects. Royal Dutch Shell, for example, has recently made a decision to divest its enviable 100,000+ net acre block in western Eagle Ford after drilling over a hundred wells with somewhat disappointing results.
But now EOG is reporting staggering results in the western portion. See more at the link.

A Note To The Granddaughters

Earlier this morning I posted a noted about safety issues of a nuclear reactor from Freeman Dyson's Disturbing the Universe.

Now this little bit of trivia from the same book p. 99:
There were many practical difficulties to be overcome before these [safety] ideas could be embodied in functining hardward. The greatest contribution to overcoming the practical difficulties was made by Massoud Simnad, an Iranian metallurgist who discovered how to make fuel rods containing high concentrations of hydrogen. He made the rods out of an alloy of uranium hydride with zirconium hydride. He  found the right proportins of these ingredients to mix together and the right way to cook them. When the fuel rods emerged from Massoud's oven, they looked like black, hard, shiny metal, as tough and as corrosion-rssistant as good stainless steel.
So, the Iranians have a long history of working with nuclear reactors. Fascinating.

Doomsday: US Cities

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Page 2

San Bernardino, CA: filed for bankruptcy earlier this year (2015); now has a $1 million must-pay bill it can't afford. Asking for help.
Officials in San Bernardino, which has been struggling to recover from bankruptcy over the last three years, are hopeful that added costs from its response to the deadliest terrorist attack on U.S. soil since 9/11 will not further erode the city's delicate finances.
The city has incurred up to $1 million in unforeseen expenses — from the added cost of deploying police officers on extended shifts to responding to ultimately unfounded reports of new threats.
Houston, TX: first time Houston is on the list? Pensions.

Baltimore, MD: the city records its 300th homicide victim, just months after calling in the Feds to help. 

Ferguson, MO: facing insolvency (predicted, see below, scroll down);  September 21, 2015
Ferguson could become insolvent by the 2017 fiscal year, the credit-rating company said. The rating cut reflects “severe and rapid deterioration of the city’s financial position, possible depletion of fund balances in the near term, and limited options for restoring fiscal stability,” Moody’s said.
Chicago: Emanuel set to call for highest property tax raise in history to pay for police/fire pensions; will start charging $10 - $12 for garbage pick-up; will add $1 or so for taxi rides. September 3, 2015. Update: specifics spelled out. September 21, 2015.

Chicago: public school system in trouble; 1,400 jobs cut; June 30, 2015. 

San Bernardino, CA: special report, Los Angeles Times, sad, sad story. It begins:  San Bernardino, once a sturdy, middle class "All-America City," is now bankrupt, the poorest city of its size in California, and a symbol of the nation's worst urban woes.
Of the 100 biggest cities in the U.S., San Bernardino, 60 miles east of Los Angeles, was ranked the second-poorest in the nation in the 2010 census, behind Detroit. Two years later it filed for bankruptcy. Last month the City Council approved a 77-page plan that it hopes will move the city toward solvency, in part by making residents pay higher taxes and fees while further cutting their services.
San Bernardino, CA: CalPERs wins; city loses; still hasn't filed final bankruptcy plan, May 12, 2015. 

Atlantic City, NJ: six notches deeper into junk territory, January 13, 2015.

Chicago, IL: Moody's drops Chicago's credit rating to "junk" status, May 12, 2015

Milwaukee, WI: violence spiraling out of control, May 7, 2015.

Stockton, CA: coming out of bankruptcy, March 17, 2015.

San Bernardino, CA: update on bankruptcy, March 17, 2015.

Ferguson, MO: unable to prove the white cop on black killing was racially motivated, Attorney General will bankrupt the city, threatening to dismantle the police department.

Chicago, IL: downgraded. Bonds just two steps above junk status. February 27, 2015.

Detroit, MI: entire power grid goes down. December 2, 2014. No explanation. 

Stockton, CA: a federal judge rules that public sector pensions are not protected when a city declares bankruptcy. October 1, 2014.

Atlantic City, NJ: Moody's cuts credit rating two steps to junk for Atlantic City -- July 24, 2014. First mentioned (in passing) back in December, 2013.

Long Beach, CA: Boeing to shut down C-17 plant three months early. About 2,000 workers support the C-17 program in California. First time Long Beach makes the Doomsday: Cities list.

NYC, NY: Municipal health care system budget deficit will more than triple to $1.4 billion in four years. February 25, 2014.

Chicago, IL: Chicago workers protest as pension crisis brews. After years of avoiding the issue, the city of Chicago is facing a massive spike in its annual bill for the pensions it promised current and retired workers. Next year, the city's required contribution will more than double to $1.07 billion. February 19, 2014.

Top ten cities with highest tax rates. USA Today is reporting: #1 (worst), Wilmington, DE; Detroit, MI; Louisville, KY; Portland, ME; Providence, RI; Columbus, OH; Baltimore, MD; Milwaukee, WI; Philadelphia, PA; #10, Bridgeport, CT. I find it interesting the cities in most financial trouble have highest tax rates. February 15, 2014.

Chicago, IL: one day closer to junk. Mayor Rahm Emanuel's administration is making preparations to issue up to $900 million in bonds this year to lower some of its borrowing costs, push other debt off into the future at an overall higher cost, cover legal settlements and pay for construction, building maintenance and equipment. February 3, 2014. 

New York City, NY: new mayor. Listen to the folks he picked to introduce him at the inauguration. This is why he limited attendance by reporters. January 1, 2014. 

Chicago, IL: day of reckoning. Long story in Financial Times
Morgan was one of about 50 elementary schools forced to close this year, collateral damage from the ballooning pension crises in Chicago and the state of Illinois. The budget gap in Chicago’s school district alone is $1bn, mainly because of pension liabilities, while the combined unfunded pension liabilities of the city and the school district runs to over $27bn.
Rahm Emanuel, Chicago’s Democratic mayor, has said the school closures – along with 3,000 job cuts in the school system – were necessary to close the yawning hole in the district budget. The episode has further soured the mayor’s relations with the teachers union, which held a seven-day strike last year. Karen Lewis, head of the union, called the school closures “racist” and “classist.”
Atlantic City, Las Vegas: could these two cities be the next Detroit? Casinos are closing in Atlantic City; real estate remains depressed in Las Vegas; and casinos are opening up across the United States (December 21, 2013).  
As of 2013, racinos are legal in ten states: Delaware, Louisiana, Maine, New Mexico, New York, Ohio, Oklahoma, Pennsylvania, Rhode Island, and West Virginia (racinos are "slot machines at old horse-racing and dog-racing tracks).

Tracks like Delaware Park and West Virginia's Mountaineer Park, once considered places where local degenerates bet on broken-down nags in claiming races, are now among the wealthiest tracks around, with the best races.
Detroit, MI: Detroit is eligible for bankruptcy -- judge

Detroit, MI: The Drudge Report links a story saying that "the Feds have started bailing out Detroit." In fact, it was a grant that the city applied for, competing with others; the money will go to the Detroit firefighters.  I think reading the entire story, and not just the DrudgeReport link will provide a better understanding of the issue. I have no problem with this. We probably spend this amount of money in Iraq and Afghanistan on a daily basis. Headlines like these tend to tarnish the "Drudge" image.

Desert Hot Springs, CA: the city votes to declare "a fiscal emergency" in one last big to avert bankruptcy, November 20, 2013. 

Desert Hot Springs, CA: A resort town in California warned on Tuesday that it will run out of money by March due to burdensome salary and pension costs and could join other U.S. cities that have recently filed for bankruptcy protection.
A bankruptcy filing by Desert Hot Springs, a city of 26,000 about 110 miles east of Los Angeles, would make it the third California city along with San Bernardino and Stockton to seek court protection from creditors.
San Bernardino and Detroit - the biggest U.S. city to seek Chapter 9 protection - are likely to set precedent on whether retirees or Wall Street bondholders suffer the most when a city goes broke.
The problems in Desert Hot Springs came to light last week when a new finance director reviewed the city's records and discovered a $3 million shortfall in its budget of $13.5 million. Amy Aguer, the interim director of finance, did not have details on how the shortfall occurred but said it was the result of higher-than-expected pension and salary costs, especially in the police department, and overly optimistic estimates of revenue. November 14, 2013.

Vern Whitten Photography

Vern Whitten Photography has sent some new photos. I certainly appreciate getting these.


There are two sets of photos: a) energy; b) scenery.

In the energy portfolio, they are all incredible. I particularly enjoyed:
  • #7 (of 36)
  • #19 and #20 (0f 36) as pairs to hang on a wall.
  • #21, #22, and, #23: brand new trucks, probably made at the factory where one of my sons-in-law works
In the scenery photos: all incredible, but the aerial shots of the groundhogs -- priceless.

Just in time for Christmas gifts. I think a lot of roughnecks would love letting their parents in Texas or Louisiana or Idaho see what they are involved in, in the Bakken.

Vern Whitten Photography

Montana Update

Don sent me these. Thank you.

Richland county, four (4) Bakken well completions:
  •  CLR, Levengood 1-5H, TD 13,739 feet (short lateral), 282
  •  CLR, Reimann 3-23H, TD 19,963 feet (long lateral), 208
  • Whiting, Mullin 21-24-1H, TD 19,787 feet (long lateral), 452
  • Whiting, Weber 24-30-1H, TD 20,225 feet (long lateral), 1,106
Sheridan County, three (3) Bakken completions:
  • TAQA North, Jerde 10-1H, with two laterals, TD 11,610 feet (short lateral), and TD 7,850 (?), no IP
  • TAQA North, Jerde 10-1H-2, TD 12,274 feet (short lateral), 14 (no typo). 
  • TAQA North, Bolke 7-13, TD 12,319 feet (short lateral), 5 (no typo).
 Disclaimer: when I state there are no typos, I simply mean that I double-checked what I typed with what I saw from the original source. There could still be errors, and I could have other typos elsewhere. Check with original source if one has questions. These results would have come from The Fairfield SunTimes.

To The Granddaughters

I continue to enjoy Freeman Dyson's Disturbing the Universe. Today's excerpt:
Nuclear reactors are controlled by long metal rods containing substances such as boron and cadmium, which absorb neutrons strongly. When you want to make the reactor run faster, you pull the control rods a little way out of the reactor core. When you want to shut the reactor down, you push the control rods all the way in.
The first rule in operating a reactor is that you don't suddenly yank the control rods out of a shut-down reactor. The result of suddenly pulling out the control rods would in most cases be a catastrophic accident, including as one of its minor consequences the death of the idiot who pulled the rods. All large reactors are therefore built with automatic control systems which make it impossible to pull the rods out suddenly. 
These reactors possess "engineered safety," which means that a catastrophic accident is theoretically possible but is prevented by the way the control system is designed. For Edward Teller, engineered safety was not good enough. He asked us to design a reactor with "inherent safety," meaning that its safety must be guaranteed by the laws of nature and not merely by the details of  its engineering.
It must be safe even in the hands of an idiot clever enough to by-pass the entire control system and blow out the control rods with dynamite. Stated more precisely, Teller's ground rule for the safe reactor was that if it was started from its shut-down condition and all its control rods instantaneously removed, it would settle down to a steady level of operation without melting any of its fuel.
"It must be safe even in the hands of an idiot clever enough to by-pass the entire control system and blow out the control rods with dynamite." And all I can think of is Homer Simpson.

Social Networking -- This Will Brighten Your Wednesday

My daughter knew how much I liked to review products over at She suggested I read the comments for this product.

Active rigs: 181

RBN Energy: Part 2, the Tuscaloosa Marine Shale.
The potential for the Tuscaloosa Marine Shale (TMS) tight-oil play to become the next big thing in U.S. oil production is attracting exploration and production companies willing to put some money at risk in the hope of big payoffs. The TMS seems to have a lot going for it. The play in central Louisiana and southwestern Mississippi is said to have seven billion barrels of oil in place deep below ground but only a stone’s throw from the pipeline networks, terminals and refineries of the Gulf Coast. But succeeding in TMS requires overcoming the play’s challenging characteristics through nuanced drilling techniques and completion formulas. Today in the second part of our series on TMS we examine what the E&P pioneers have accomplished so far in drilling and production, what they’re learning from their experience, and what it would take to turn TMS’s potential into reality.
The Wall Street Journal

Previously posted in a shorter note last night:
The Canadian subsidiary of Chinese state-owned energy giant Cnooc Ltd.has been awarded exclusive rights to proceed with a proposed terminal to export liquefied natural gas from Canada's Pacific coast, local government and company officials said Tuesday.
Known as Aurora LNG, the project is one of nearly a dozen proposals for plants to export surplus natural gas from British Columbia, none of which have been formally approved yet by their corporate sponsors. In addition to Calgary-based Nexen Inc., a wholly owned unit of Cnooc, the project is also backed by two Japanese companies: oil explorer Inpex Corp. and construction engineering firm JGC Corp.
It comes as part of a move by Canada to transform its underdeveloped northern Pacific coast into a major hub for LNG by using a glut of natural gas from untapped reserves inland. The Canadian government has also been trying to shift gas exports away from the saturated U.S. market and into LNG-hungry Asian markets.

Heard on the street -- Apple's Retina Mini available this week.
Living up to past glory is no easy task, especially if you are Apple. AAPL +0.19% Illustrating this was Tuesday's uncharacteristically quiet launch of the new iPad Mini with a Retina display.
Last year, Apple launched the first version of its smaller tablet to now-customary long lines of waiting fans, who snapped up more than three million units of the then-new, seven-inch iPads over the launch weekend. That was double the launch sales for the previous iPad release. Last year's figures also encompassed the launch of the iPad 4, although analysts believe the bulk of the sales were for the Mini.
It will be a challenge for Apple to make the same sorts of claims this year. The company has effectively staggered the launch of its new iPads, with the iPad Air hitting stores earlier this month and the Retina Mini delayed until now. That was reportedly due to production issues that have limited manufacturing capacity. Reflecting this, Apple confirmed Tuesday that the Retina Mini needs to be ordered online for customers who want to pick it up in stores.
I will be getting a new Apple iPad; can't decide between "full-size" and mini; most likely a mini.


Now comes the hard part. Reuters is reporting:
The operator of Japan's crippled Fukushima nuclear plant will as early as this week begin removing 400 tonnes of highly irradiated spent fuel in a hugely delicate and unprecedented operation fraught with risk.
Carefully plucking more than 1,500 brittle and potentially damaged fuel assemblies from the plant's unstable Reactor No. 4 is expected to take about a year, and will be seen as a test of Tokyo Electric Power Co's ability to move ahead with decommissioning the whole facility - a task likely to take decades and cost tens of billions of dollars
If the rods - there are 50-70 in each of the assemblies, which weigh around 300 kg (660 pounds) and are 4.5 meters (15 feet) long - are exposed to air or if they break, huge amounts of radioactive gases could be released into the atmosphere. 
The hazardous removal operation has been likened by Arnie Gundersen, a veteran U.S. nuclear engineer and director of Fairewinds Energy Education, to trying to pull cigarettes from a crushed pack. [Somehow this doesn't seem like such a big deal.]
When the time comes, extracting spent fuel from the plant's other reactors, where radiation levels are much higher because of core meltdowns, will be even more challenging. Reactors No. 1 and No. 3 sustained heavier damage than No. 4 as a result of the March 2011 earthquake and tsunami that knocked out power and cooling at the Fukushima station, triggering three meltdowns that sent a plume of radiation into the air and nearby Pacific Ocean.