Wednesday -- June 25, 2014; Great RBN Energy Post On Getting Canadian Crude (Which Doesn't Explode) To The Gulf Of Mexico

Active rigs:

	6/25/2014	06/25/2013	06/25/2012	06/25/2011	06/25/2010
Active Rigs	194	187	213	170	124

RBN Energy: getting Canadian crude oil to the Gulf of Mexico.

Much of RBN’s forecast 1.4 MMb/d expansion in Canadian crude production between 2014 and 2019 is expected to come from oil sands bitumen in Western Canada. An increasing proportion of this crude has to find its way to refineries configured to process this type of crude on the Gulf Coast. But pipeline capacity on that route is in critically short supply.  An important set of expansions to existing Enbridge and Enterprise pipelines between Canada and Texas, parts of which are set to come online soon, hopes to alleviate the situation. Today we wrap up a two part series describing these projects and their impact.

First, the recap:

In Part 1 we described plans to expand the Enbridge Western Gulf Coast Access System (WGCAS) to deliver as much as 800Mb/d of crude from Western Canada to the Texas Coast. This system expansion has become increasingly important to Canadian shippers because of continued delays in permit approval for the rival TransCanada Keystone XL pipeline. The WGCAS system has three sections. The first is the 2.5 MMb/d Enbridge Mainline that stretches from Edmonton, Alberta across the US border to the Chicago, IL region and delivers crude from Western Canada and the Bakken to the US Midwest and Eastern Canada. The second section is the Enbridge Spearhead pipeline between Chicago and Cushing, OK. The third is the Enbridge/Enterprise Products Partners 50/50 JV Seaway pipeline between Cushing and Freeport, south of Houston on the Texas Gulf Coast. Although the pipeline capacity on Spearhead is the weakest link in the current WGCAS, we explained that Enbridge has to expand the whole system, including sections of the Mainline north of Chicago to accommodate expanded demand from Canadian producers. Expansions to one of those northern sections, the Alberta Clipper, have been delayed until late 2015 by permit issues. In this episode we describe the two new build sections of the WGCAS between Chicago and the Gulf Coast and discuss the overall impact of the expansion.

Today's post discusses Flanagan South and the Seaway Twin.

Memo to self: article has been saved.

The Wall Street Journal

The big story that we started posting / linking last night: US ruling loosens four-decade ban on oil exports. Fourteen hours later, this is now an "old" story.

The MDW predicted this a long, long time ago: "sicker" and "at risk" consumers more likely to enroll in ObamaCare. Well, duh. People enrolled in new plans under the health law are showing higher rates of serious health conditions than other insurance customers, according to an early analysis of medical claims, putting pressure on insurers around the country as they prepare to propose rates for next year.

It seems like this story has been reported for the past three days, but it's again in the front section: new-home sales soar in May.

For air travelers about to embark on their family summer vacation, it's nice to know that a federal judge, a single individual, agrees with the ACLU, and has said the US government's practice of putting passengers on "no-fly lists" is unconstitutional. Just one more reason why we're driving to California this year. Not really, but it's fun to say that.

GOP is shouting louder on missing IRS e-mails. Glad to hear the GOP is finally doing something about this. The shouting will last through July and then everyone goes on August vacation.

Here it comes: Legislators facing a $1.5 billion budget gap in Pennsylvania are considering imposing a new tax on natural-gas production; the UK did that on North Sea drilling and came close to destroying the industry; London now scrambling to backtrack hoping drilling picks up. (Actually, I lost the bubble on that story; I could be way wrong; don't quote me on it.)

Losses in Iraq spur US to re-think Syria. Meanwhile, John Kerry is polishing another draft of his global warming speech.

Finally, the government decides to commence airstrikes in Iraq; oh, never mind. Those were Syrian warplanes, not American, that struck western Iraq yesterday.

Kurds signal loyalty to "Iraq," but not to Maliki.

Tribes once loyal to Baghdad give fealty to militants. Are we starting to see a trend here? I look for Mr Maliki to request political asylum in some friendly country. He will bring about $50 billion in unmarked $20-bills (US) with him. His family and entourage will have another $100 billion. The rumor is that Mr Maliki has requested his aides translate the wikipedia entry regarding the political asylum of the Shah of Iran.

Top story in the second section: "Fracked Oil Proves Volatile." I posted a stand-alone post on this story earlier; simply scroll down until you see the exploding post.

I guess even the federal government is getting tired of all these recalls: federal regulators have warned that airbags in millions of cars could explode (sort of like fracked oil, I suppose) but have not ordered a formal recall.  I assume Government Motors said no mas. Actually, the fact is this: one more major recall and the only cars on the US highways will be the "Bolt" from Tata Motors and old Ford Pintos.

Here we go again, another company looking to move overseas to avoid US corporate taxes: Walgreens. The secret here is to do this quickly before Congress finds out about this newest fad to avoid corporate taxes. In the old days, US corporations just parked their money overseas; now they are parking their entire headquarters overseas.

The Los Angeles Times

Top story is all about all the elections. Boring.

But we have the new name for the uncivil war in Iraq: the Sunni Awakening. In downtown Baghdad, The Big Sleep.

And the rest is all sports, or horticulture, or restaurant reviews.

Starbucks

I don't know if the new Starbucks prices will affect me or not (I only order a "tall dark" -- I used to order a "tall Blonde" but never got what I expected). But I'm starting to enjoy my own coffee at home and $0.10 worth of butter toast and $0.65 cents worth of corn flakes instead of the $2.45 chocolate croissant, so it's possible I will be visiting Starbucks less often. For the past two weeks, my time at Starbucks has been considerably lessened, and I have survived rather nicely. So, we'll see. Yesterday, I did stop at Starbucks to get a glass of water while biking in somewhat hot Dallas weather. Just before the thunderstorms. There's a lot of chatter why Starbucks is raising their prices: it has nothing to do with the cost of the commodity. Some associate it with the company's new program to send all their baristas to college on a Starbucks scholarship or the new $15/hour minimum wage in Seattle. One would think the latter would only affect Seattle coffee shops, but it turns out there are so many Starbucks in Seattle, that at $15/hour minimum wage, the company has to raise coffee prices worldwide to come up with the cash to pay Seattle baristas. At $15/hour not much need to leave tips any more. The company will not be raising prices on their K-cups which haven't been selling all that well, apparently. I've never asked if one can get a tall blond in K-cups.