CBR: Coming Of Age -- RBN Energy -- September 11, 2014; Global Warming Hits Rapid City, SD -- Earliest Snowfall Since 1888

RBN Energy: CBR -- coming of age. Another article to save and/or bookmark.

A recent SEC filing to register a proposed Initial Public Offering (IPO) for their Master Limited Partnership (MLP) by terminal operator USD Group - whose principal asset is a unit train crude loading terminal in Hardisty, Alberta - reveals long-term commitments to rail by Canadian shippers. That development reflects frustration with continued delays to the expansion of congested pipeline capacity out of Western Canada but also indicates a new maturity in crude-by-rail transport. Today we discuss crude-by-rail’s coming of age in Canada.

And as we described in the “Go Your Own Way” blog series, a number of similar large rail terminals are also being built out and coming online in Edmonton and Kerrobert – Western Canada’s other crude oil gathering hubs. These developments are not unexpected in the context of continued delays in solving pipeline infrastructure constraints out of Canada. What is interesting about the USDP IPO filing is that the company clearly expects that its Hardisty rail terminal will be in business for the long term and should continue to generate income to distribute to investors. The 5 year terms of the throughput agreements associated with USDP’s Hardisty terminal are longer than similar commitments made by shippers in US crude basins like the Bakken. If successful, the IPO will add a degree of maturity to the crude-by-rail industry that has sometimes been considered a “stop-gap” solution to rescue stranded crude production until pipelines can be built.

Our view is that rail will continue to occupy a vital place in the North American crude oil distribution system. But rail is too expensive to replace pipelines as the preferred method of crude transport and is not suited to transporting the huge volumes of oil that pipelines ship around North America today. As an example, if the Hardisty rail terminal had to take the place of the delayed Keystone-XL pipeline that would ship 830 Mb/d of crude then it would need to expand its operation beyond the proposed Phase III with its 5 unit train loading tracks that could only load at best 420 Mb/d of crude (assuming 120 cars in a unit train holding 700 Bbl per car and five unit trains loaded each day). As a result rail is likely to remain the marginal transport choice that producers choose when pipeline capacity is not available or delayed. In the case of North Dakota that means rail will continue to be the first choice to ship crude to the East and West Coasts because there are no pipelines – but pipelines are rapidly replacing rail shipments to the Gulf Coast. Longer term, in the case of Canadian bitumen, the jury is still out on the question of whether shipping reduced diluent railbit or rawbit can provide rail with cost advantages over pipelines based on the diluent penalty. That answer has to wait until sufficient infrastructure is built out to determine unit train rawbit economics.

And, all of this, a "big thank you" to Mr Obama.

Active rigs:

	9/11/2014	09/11/2013	09/11/2012	09/11/2011	09/11/2010
Active Rigs	198	180	193	199	141

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Apple

SeekingAlpha: why Apple's product launch rocked! This article will probably be available by subscription only later this month, but that's fine. It doesn't say anything we already didn't know. Everyone has their favorite from the hundreds of announcements, upgrades, changes, etc., provided by Tim Cook. My favorite: mobile payments. The Watch? Sometimes I get the feeling that Apple released the Watch just to get critics off their back. The technology is incredible, the sapphire crystal and the 18-karat gold backing are amazing, but time will tell whether it adds much to the Apple ecosystem. By the way: did you see how Apple finally got around from all those copyright problems. They have moved away from iWatch and iPayments. Apple stole a page from Prince, incorporating an "icon" (the famous Apple) as the first part of Watch and Payments. No copyright problems at all. Again, very, very clever.

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For Investors Only

Trading at new highs: CFN, EW, GPRO. And that's about it. Pretty dismal.

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Global Warming
Climate Change
Extreme Weather
New Ice Age

Seven inches of snow in the Rapid City, South Dakota, area overnight. This is the earliest snowfall in the city of Rapid since 1888. Not even the middle of September yet. When I was growing up in Williston, we usually looked forward to wonderful "Indian summers" in September. Now, with global warming we get snow. And more:

The NWS says many areas across far western South Dakota might experience a hard freeze by Friday morning as temperatures are expected to dip into the 20s and even teens in the Black Hills.

Overnight (and more to come). Biggest "official" snow reports so far:

• Custer - 8"
• Mt. Rushmore - 7"
• Johnson Siding - 5"
• Hill City - 4.5"

Look for increasing totals in the Northern/Central Hills between now and noon as snowfall has intensified in that area.
Meanwhile, summer snow blankets Denver.

Gonna be a long winter for the warmists.

It looks like the "climate change" we're getting is the climate we had in pre-industrial days. LOL.

Eighteen years and counting.

It will be interesting to see if the keynote speaker at the UN Conference on Climate Change (to which "no one" will be attending) mentions global warming, now that they call it "climate change." And if it's not "global warming," exactly what "climate change" are we talking about? Back to the Ice Ages? I can't make this stuff up.