The Bakken Crude Oil Bottleneck -- Update -- RBN Energy -- A Must-Read For All Bakken Enthusiasts; Washington, DC, Council With Nex Tax On Health Care Insurers -- How's ObamaCare Working Out?

Active rigs:

	5/7/2014	05/07/2013	05/07/2012	05/07/2011	05/07/2010
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RBN Energy: the Bakken bottleneck should open up this year.

New crude oil pipelines expected online this fall are set to unlock congestion in the Rockies that has built up over the past three years. During that time, growing volumes of Canadian, Bakken and local production have descended on the Guernsey, WY trading hub that is the regional crude distribution center. The new pipelines will increase takeaway capacity from North Dakota and Montana to Cushing via Guernsey. They will also make room for more Canadian barrels travelling to market through the Rockies and for rising local production. Today in the first of a two part series we look at the existing and new pipeline infrastructure into and out of Guernsey.

When tight oil shale production from the Bakken in North Dakota and Montana began to crank up in 2010, regional producers ran into pipeline takeaway constraints whether they tried to ship crude east on the Enbridge system via Clearbrook, MN to Chicago or south and west on True Company pipelines through the Rockies to Guernsey, WY.

By February 2012 that congestion was causing up to $26/Bbl price discounts for Bakken crude at the pipeline hubs of Clearbrook and Guernsey versus US domestic crude benchmark West Texas Intermediate (WTI) delivered to Cushing, OK.  That was on top of still more discounts being suffered by WTI. 

With limited pipeline capacity between Cushing and the Gulf Coast, a glut of crude built up in the Midwest and the price of WTI was discounted heavily versus crudes priced on an international basis on the East, West and Gulf Coasts.

These price discounts and transport constraints upstream of Cushing justified the development of rail loading terminals, first in North Dakota during 2012 and later in the Rockies in 2013 (and ongoing) to allow crude delivered by rail to bypass Midwest congestion and reach higher priced coastal markets.

Summary:

It remains unclear whether the new pipelines into and out of Guernsey and the expansion to White Cliffs out of the DJ Basin will completely relieve congestion in the Rockies if Bakken and Canadian production coming through the region do not leave room for rising local production. For the moment adequate takeaway capacity will rely on both the new pipelines and increased rail capacity to meet demand. And that’s where we’ll go in Part 2 of this series – to look at the growth of rail loading takeaway capacity in the Rockies and to compare the two transport alternatives.

The Wall Street Journal

Yes, I was waiting for this shoe to drop: for the first time in three years, the economy contracted 1Q14. Recovery? Now you know why the president is working so hard to get the economy off the front page with all that time spent on global warming yesterday. By the way, it was snwoing in North Dakota yesterday; relatively rare for this time of year. So, how's that Obama economy working out? The market responded. Janet Yellen is concerned. And oil and gas companies are surging. By the why, the economy is so bad, that even with near-record exports, the US economy contracted. I don't know one can spin that, but the Obama administration will do so. Having said that, I am more bullish on American than I have ever been. Presidents come and go. Eventually, America will get its mojo back.

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Yes, here it comes. Washington, DC, council approves tax on aid health care insurers to help pay for the health care exchange.

Ms. Kofman also said she believed the district should continue running its own exchange, noting the federal government's own difficulties serving 36 states through the HealthCare.gov website.

"If we relied on the federal government to set it up for us it would have been very difficult for people to get coverage for a very long time," she said.

The district's exchange has done relatively well among the state-run exchanges, with a high proportion of younger people who have signed up for private coverage through it. But its sign-ups are also limited by the district's size and the large number of residents who are covered through employer-sponsored insurance or Medicaid. Only around 10,000 people picked private individual coverage through the exchange this year, according to data published by the federal government.

10,000 enrolled in Washington, DC? Not going to cut it.

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The Los Angeles Times

Stanford University will sell off coal investments ... just because it will make them feel better.  Social investors, I guess. I assume they don't invest in tobacco, alcohol, firearms, oil and gas, either.

US rejects California design of driver's licenses for immigrants.

Federal authorities have rejected California's proposed design for a driver's license for immigrants in the U.S. illegally, saying it is not distinguishable enough for security purposes from permits given to citizens.

The Washington officials want the license to state clearly on its face "that it is not acceptable for official federal purposes" and to have a design or color that differentiates it at a glance from other licenses.

The current design does not differ from other California licenses except for a subtle mark on the front and a disclaimer on the back in small print: "This card is not acceptable for official federal purposes."

Officials said Tuesday that the decision by the U.S. Department of Homeland Security could delay distribution of the first licenses because immigrant-rights activists have vowed to fight proposals that would make them look significantly different from other licenses.

The activists consider conspicuous markings to be a kind of scarlet letter. They and others say such marks could lead to mistreatment.

I'm not even sure why California requires driver's licenses. I'm sure the next step for the state is to eliminate the requirement altogether.