Active Rigs Down To 186 From Recent High Of 200 -- September 29, 2014

Active rigs:

	9/29/2014	09/29/2013	09/29/2012	09/29/2011	09/29/2010
Active Rigs	186	184	190	196	143

 
I was eagerly awaiting "the number" this morning. When I noted the "precipitous" drop from 200 to 194 (or thereabouts) I suggested there were two possible reasons; a reader told me to expect the drop because the "surface" rigs generally began drilling on Sunday and the number gradually declined as the week wore on.

So, I was curious to see if Monday's (today's) number would be the same, or perhaps even a bit better than Friday.

Not only did we not see a slight increase (as the reader suggested should happen), another significant drop. This is what I wrote then:

Comment: When I see the number of active rigs drop from 200 to 193 in just a few days, I at least have to ask the question: is there a particular reason? Probably not. Just one of those things. But remember, it's the best time of the year in North Dakota to be drilling. Why would the operators be stacking rigs? What has changed in the past few weeks? Two things: price of oil and new flaring rules are about to go into effect.

It is my impression that the price of oil, in the short term (less than 6 months), has no effect on CAPEX or the drilling plans for operators.

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Miscellaneous Rants

From The Los Angeles Times: ObamaCare networks will get even tighter as more physicians are taken off the list.  Somewhere I seem to recall, "if you like your doctor, you can keep your doctor." No.

From The NY Post: ObamaCare's first anniversary report card -- F.  This is very, very good news; the next report won't be worse.

Also from The Los Angeles Times: Govenor Brown vetoes bill that would have curtailed law enforcement surveillance using drones except in oil spills. I can't make this stuff up. Reminds me of the North Dakota criminal case against an operator for the death of six ducks in the worst spring flooding ever in the recorded history of North Dakota.

And finally, one last story from The Los Angeles Times: the city of Ferguson is about ready to explode/implode, and folks want law enforcement to leave. I can't make this stuff up. This Ferguson is not in California. Or Colorado. That I could understand.

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Miscellaneous Rants

It looks like riots in Hong Kong will affect the US financial markets more than ObamaWar.

PIMCO: too big too fail? I think this is a scarier story that some folks realize. I can't say why. It's just a feeling. The headline: billions flow out the door at PIMCO.

Tesla has to persuade skeptics to install chargers in China. The concern: watching iPads and iPhones blow up when folks try to charge their mobile devices at these car charging stations.

LOL. Team USA heads for the repair shop after (another) Ryder Cup defeat.

Car sales may be doing well in the US, but overseas, a big concern. Platinum skids on car-demand worries; platinum is used in vehicle exhaust filters.

Speaking of which, down here in Texas, it really does feel like "Ford country." Which reminds of a CNG - Ford - Texas story a reader sent me, if I can find it. Here it is ("mail search" certainly works nicely). This was from a recent issue of The Wall Street Journal:

At Mike Scully's Apple Towing in Houston, just one of their big Ford F650 tow trucks saves more gasoline each year than 20 Nissan Leaf electric cars.

When it comes to reducing carbon dioxide, nitrogen oxides and other pollutants, Mike's F650s are equally impressive, and his fuel cost per mile is about the same as that of a four-seat Jeep Wrangler. What is Apple Towing's secret?

The F650 tow trucks run on natural gas, which they refuel for less than $1.70 per gasoline-gallon equivalent, or gge.

PIRA Energy Group estimates that natural gas in transportation will approach 800 million gges this year. Do some simple math and it quickly becomes apparent that natural-gas vehicles (NGVs) will displace 10-12 times more gasoline and diesel than the 250,000 electric cars currently on the road.

When complete, Apple Towing's small fleet of 24 natural-gas tow trucks will displace more gasoline than around 700 Chevy Volts.

And here is a nice side benefit: Those Volts would cost federal taxpayers a whopping $5.3 million in subsidies while Mr. Scully's F650 Fords cost them nothing.

For more than a decade, policy makers and the automotive press have been enamored of electric vehicles, lavishing them with attention and incentives. All this even though when it comes to reducing oil dependence, pollution and fuel cost, the transition of America's truck fleet to natural gas is the hands-down winner.

Mention NGVs to a Washington policy wonk, however, and he will immediately start chattering about chickens and eggs. Received wisdom tells us that natural-gas vehicles won't sell until a huge national refueling infrastructure is built (and refueling infrastructure cannot get built without vehicles).

Apple Towing's Mr. Scully, not being a poultry farmer and thus unaware of this seemingly insoluble dilemma, asked our company, Nat G Solutions, to upgrade his F650s and at the same time install a natural-gas fueling compressor in his parking lot and hook it up to his city gas line. The great infrastructure crisis disappeared.

The other solution to the infrastructure challenge lies in the new generation of multi-fuel systems found on most modern NGVs. For trucks with gasoline engines, most natural-gas upgrades allow them to run on either natural gas or gasoline. These bi-fuel vehicles are user-switchable and they automatically revert to gasoline if the compressed natural gas runs out or the system has a fault.

For diesel trucks, a new generation of retrofit systems—from companies like NGV Motori USA and Landi Renzo —allow us to upgrade the big diesel engines to run on a 60/40 blend of natural gas and diesel, which is combined in real-time inside the engine. If the compressed natural gas runs dry, the truck switches back to 100% diesel and keeps on driving.

This dual-fuel approach is now opening the door for long-haul natural-gas trucking without the need for multibillion-dollar infrastructure incentives or even the need to go out and buy new tractor-trailers.

We're done.