Monday, January 27, 2014

The Problem WIth Solar, Wind

Chicago Business is reporting:
Chicago-area consumers are being asked to take it easy on the power grid tomorrow.
PJM Interconnection, the operator of the grid in all or parts of 13 states, including Northern Illinois, earlier today issued a call for consumers to take conservation steps during high-demand periods tomorrow, as the severe cold continues to put stress on power supplies.
And that's the problem with wind- and solar-generated electricity: it can't ramp up when extra electricity is needed.

Thirteen (13) New Permits -- The Bakken, The Williston Basin, North Dakota

Active rigs:

Active Rigs19019020416486

Thirteen (13) new permits -- 
  • Operators: CLR (5), XTO (3), Hess (2), OXY USA, American Eagle, MRO
  • Fields: Winner (Williams), Banks (McKenzie), Bear Creek (Dunn), Snow (Billings), Colgan (Divide), Reunion Bay (Mountrail)
  • Comments:
Wells coming off the confidential list were posted earlier; see sidebar at the right.

Three (3) producing wells completed:
  • 25533, 493, SM Energy, Tomlinson 3-2HS, Alexandria, t11/13; cum 12K 11/13;
  • 25656, 1,104, BR, Washburn 43-36MBH, Charlson, t1/14; cum 11 --;
  • 25886, 2,886, BR, Blue Ridge 34-31TFH, Keene, t1/14; cum 11 --;
CLR canceled four (4) permits:
  • 24332, PNC, CLR, Steele Federal 4-24H, Banks, 
  • 24333, PNC, CLR, Steele Federal 3-24H, Banks,
  • 24334, PNC, CLR, Lansing 4-25H, Banks,
  • 24335, PNC, CLR, Lansing 3-25H, Banks,   
There are two other very nice Lansing wells in this section; those four canceled wells were replaced by four new permits:
27548, loc, Lansing 3-25AH, Banks,
27549, loc, Lansing 4-25AH1, Banks,
27550, loc, Steele Federal 3-24AH, Banks,
27551, loc, Steele Federal 4-24AH1, Banks,

Wells coming off confidential list Tuesday:
  • 23298, 1,351, Petro-Hunt, Boss 154-99-18C-17-4H, Stockyard Creek, t12/13; cum --
  • 24847, drl, QEP, MHA 7-06-07H-147-92, Heart Butte, no production data,
  • 25008, 1,062, WPX, Olson 12-1HC, Van Hook, t12/13; cum 5K 11/13;
  • 25171, 406, Baytex, Pulv 31-30-162-99H 1PB, Ambrose, producing, looks like a good well for Ambrose, target = Drill lateral in Primary Target: Below Three Forks 10 Marker; t8/13; cum 34K 11/13;
  • 25810, 130, American Eagle, Lauren 2-3N-163-101, Colgan, t11/13; cum 4K 11/13;

The Ultimate Catch-22

Walmart and Walgreens will provide free medication for anyone showing up with a prescription if they can prove they signed up for ObamaCare but are pending approval due to the government's inefficiency.

Of course, the catch is in the deal: one has to have a prescription. And, of course, without insurance, even if it's pending, most folks, to get that prescription, will have to pay for the doctor's visit with one's own money.

From a Drudge Report link, Breitbart is reporting:
Walgreens' and Walmart's pharmacies announced this month that they will help with the botched Obamacare rollout by providing free prescriptions to customers whose insurance coverage is pending.
The move, while well-intentioned, only helps those possessing a prescription, leaving anyone still seeking a doctor’s assistance stranded. The policies of both corporations this month were simple: those who can prove they signed up for Obamacare through and have a prescription can file it for free, even as they are not yet covered because of the system's inefficiency.
The problem is that to have a prescription, patients must go to a doctor, and their pending insurance applications mean they will have to either handle the full cost of a visit themselves. If they wait until their application is no longer pending, they are not eligible to receive the benefits from the pharmacies’ programs.
Walgreens was the first pharmacy service to announce that they would pitch in. Speaking to Breitbart News, a spokesperson for Walgreens confirmed that the corporation unilaterally made the decision to enact the temporary policy, but when asked whether they were in communication with the government responded that the corporation intends to be "in consistent and frequent communication with various groups... we are working with them to flag any systematic issues that we may see."
The relationship between Walmart and the Obama White House is more complicated. Walmart's spokesperson would not provide any specifics regarding whether there were discussions between public and private leaders on the matter, and the history between the two sides shows neither clear loyalty nor antagonism.
President Obama has appointed Walmart leaders to various positions of power. The company—a major seller of guns in some parts of the United States—has joined with the NRA to negotiate safer gun sales with the administration as well. Because both Walmart and Walgreens have stated they will help customers with figuring out whether their registrations are processing and with any questions they may have about the federal program, it seems impossible that the avenues of communication are closed.
Take two aspirin and call your US representative in the morning. 

Great Britain Is Sunnier Than Generally Believed; Xcel -- Cleaning Out Some Mail

Reminder: wells coming off the confidential list have been reported. EOG has two more huge wells; MRO reports a "high IP" well. 


Everybody talks about the cloudy and rainy weather in Great Britain: that turns out be another myth, I guess. Bloomberg is reporting that Britain's largest solar farm exceeded expectations, generating 15% more electricity than forecast.



October 13, 2016: you can't say that I don't follow up these articles. See note below about Minneapolis, Xcel, and CenterPoint. They all came together and signed an agreement in October, 2014. Story here.  Data points:
  • unique agreement; first-in-the-nation
  • 10-year contract, rather than the usual 20-year contract; city can end arrangement as soon as five years but with one year notice
  • 15% reduction in greenhouse gas emissions by 2015; 30% by 2030; and 80% by 2050
Original Post
We may hear a bit more from Xcel, the wind energy company, this week, how it responded to the natural gas pipeline rupture in Canada.

I was not aware of the other headwinds facing Xcel (Don doesn't miss much). From last summer -- Minneapolis may drop homegrown utility and corporate citizen Xcel Energy:
Xcel Energy Inc., the investor-owned utility that has been championed for its commitment to wind power by clean energy advocates far and wide, is at risk of being dropped as the electricity provider to this city, which is its national headquarters. Among other reasons, it is accused of not being sufficiently pro-clean energy. [Minnesotans must love paying taxes and utility bills.]
The $14 billion Fortune 500 company, which operates in eight states and has provided electricity to Minneapolis for more than a century, faces the possible cancellation of a franchise agreement that allows it to provide power to an estimated half-million residents and businesses in Minnesota's largest city and the economic hub of the 3.3-million-resident Minneapolis-St. Paul metropolitan area.
That was back in July (2013). I had not heard anything since but a google search resulted in this bit of news:
Unions and the business community joined forces Thursday to tell members of the Minneapolis City Council that they think it’s a bad idea for the city to take over the gas and electric utilities. The energy activists, though, also were out in force to say that a public takeover is an idea worth more study. After more than 50 speakers and three and a half hours of testimony, just about everyone at the public hearings had expressed an opinion except the folks who will vote to move ahead or drop the idea. City Council members did not speak during the session and will not vote on the matter until Aug. 15.
Apparently not everyone in Minnesota likes higher taxes and higher utility bills:
“I’m opposed to this takeover,” said Peter Dvergsten. “Between taking over the gas and electric utilities and streetcars back downtown, I don’t know which idea is the worst.”
“My pocketbook is running pretty close to empty,” he said. “My options are running out, but one of my options is to sell the house and move out. Where? I don’t know, but North Dakota is looking pretty good.”
Jerry Wendt was there for his condominium association, which is about to spend $330,000 to install solar panels on its roof.
“The only way we can do this is with Xcel rebates,” said Wendt, who added that the panels are scheduled for installation this fall. “We don’t want this to blow up in our faces.”
“The city will be exempt from rate controls,” said Larry Lura. “That’s going to pull more money from my pockets, and people like myself, who are in an marginal economy, can barely pay our own bills.”
Yes, the city would not have to abide by state utility regulations. 

Apparently, Xcel is still providing electricity to Minneapolis; I can't find news to the contrary. On November 5, 2013:
Xcel Energy Inc. is seeking permission to raise Minnesota electricity rates by 4.6 percent and 5.6 percent the next two years, saying the money is needed for a big push in infrastructure investment. [Wind, solar, transmission lines.]
Those hikes would amount to about $291 million, but the Minnesota Public Utilities Commission has typically cut Xcel's rate increase requests in half in recent years. If granted in full, the increases would add about $10 on average to a customer's monthly bill.

Oil Pipeline Opens, Prices Surge -- Keystone XL 2.0 South Rollout Much Smoother Than ObamaCare Rollout


January 27, 2014: I was curious as to the exact date when TransCanada started "injecting" oil into the Keystone XL 2.0 South pipeline. Interestingly, a day that will live in infamy for activist environmentalists: December 7, 2013. Seventy-two years earlier there was another day that will live in infamy. is reporting:
TransCanada is pleased to confirm that at approximately 10:04 am Central Time on Saturday, December 7, 2013, the company began to inject oil into the Gulf Coast Project pipeline as it moves closer to the start of commercial service,” TransCanada spokesman Shawn Howard said in an email.
Original Post

The Wall Street Journal is reporting:
The opening of a pipeline to ease a supply bottleneck at a key storage hub has boosted U.S. oil prices, but analysts say the rally is likely to be temporary.
Light, sweet crude for March delivery rose to $96.64 a barrel Friday on the New York Mercantile Exchange, ending the week with a 2.2% gain. It was the biggest weekly gain for U.S. oil futures in more than a month. Crude began flowing through the southern leg of TransCanada Corp.'s pipeline last week, connecting the storage hub of Cushing, Okla., to refineries along the Gulf Coast.
Supplies have been building up in Cushing, as innovations in drilling techniques increased U.S. oil production faster than the infrastructure could get it to refiners. Cushing is also the delivery point for the Nymex futures contract, and the large stockpiles there have depressed U.S. oil prices for years. While some investors expect the opening of the long-awaited pipeline to clear up that logjam, analysts and traders say the project will only move the supply glut farther south because the refineries soon will shut down to perform seasonal repairs.
And oil demand could remain tepid in the winter months, while domestic production shows no signs of slowing down.
"While the addition of the Keystone pipeline does move barrels from one point to another, it doesn't increase consumption of crude at the refinery level, and it doesn't add or subtract to the supply of crude that's coming out of the ground," said Tim Evans, an energy analyst at Citi Futures.

Monday -- Baby, It's Cold Outside

Chicago chill: -45 degrees. Next ASCE could be this winter's coldest. Energy emergency in North Dakota, South, Minnesota due to ruptured natural gas pipeline in Canada; propane shortage worsens in the Midwest (some call it an emergency, also). The president will address global warming climate change extreme weather tomorrow night. About time the president proposed a coherent "all the above" energy policy. LOL.

So how cold has it been this month? Chicago CBSlocalis reporting:
Peoples Gas says its customers have used 28 percent more gas this January compared to a year ago.
Nicor says this month has been 30 percent colder than last January; so, its customers are also using more gas.
ComEd says the overwhelming majority of its customers rely on natural gas rather than electric heat.
Active rigs in North Dakota:

Active Rigs18719020416486

RBN Energy: the perfect storm -- the polar vortex, the shortage of propane.
Last week the U.S. NGL markets entered uncharted territory.   According to OPIS, cash propane prices in the Conway, KS market reached almost $5.00/gallon for a time, responding to a massive product shortage across the entire eastern half of the country.  But at the same NGL hub, OPIS also reported that the price for ethane/propane mix (EP mix) dropped deep into negative territory at $(0.50)/gallon.  That’s crazy.  The seller is paying the buyer to take the product.  Nothing like this has been seen before in these markets.  Propane inventories continue to drop, transport trucks are moving product hundreds of miles to markets, terminals remain on allocation and a state of emergency has been declared by at least 20 state governors.  The inventory graphs look so scary that the "Black Swan" is frozen stiff.   Today we begin a series on the NGL markets of 2014, a year that this industry will be talking about for a long time.
Cold: on early morning NPR today, eastern North and South Dakota made the news -- incredibly cold weather -- well below 20 and 30 below with wind chill as low as 50 degrees below zero.

The Wall Street Journal

The imperial presidency: Mr Obama has said that he plans to go around Congress (and the people) with unilateral executive orders.  

States weigh how to spend all their money. States are experiencing revenue windfalls, as investors cashed out early to avoid new federal taxes. 

Japanese trade deficit worst on record.

Steel imports into US surge.
For some domestic steel buyers, it is now cheaper to purchase steel from China than from Pittsburgh. The reason: a near-record spread between the prices for almost all kinds of steel in the U.S. and steel prices everywhere else.
The widening spread, attributed to global oversupply and strong demand from car makers, has sparked a surge of imports, which are expected to reach 3.2 million tons in January, up 23% from 2.6 million tons in the same month a year earlier.
The average price difference between the U.S. and China has jumped to $159 per ton; a year ago, U.S. steel was actually $19 a ton cheaper, according to CRU, a price-analysis firm.
Michael's (retail, crafts) warns that it may have become a victim of an attack on its data security --- follows Target, Nieman-Marcus.

P&G sales rise on strong demand from emerging markets

Oil pipeline opens; prices surge. Stand-alone post here.

The Los Angeles Times

Later today, after the market closes, Apple will present earnings. The LA Times has a preview -- was it an iPad Christmas (I was surprised to see The LA Times use "Christmas" in a headline):
Apple reports earnings Monday after the stock markets close, and as usual every word and number will be scrutinized for clues that will lead to sweeping judgments about the company's health or decline. 
But in the myriad earnings data points released, one figure will be particularly interesting to see: iPad sales. 
Last fall, after releasing the new iPad Air and the iPad mini with Retina display, Chief Executive Tim Cook declared: "It's going to be an iPad Christmas."
Such bullishness came after what was a surprisingly tough year for Apple's tablet, which had been such a disruptive force since its release in 2010.
After selling a record 22.9 million iPads during the 2012 holiday quarter, the company saw sales of iPads fall for the next three consecutive quarters for the first time in the product's history.
The sales of 14.5 million iPads in the September 2013 quarter was up only slightly from the same period a year earlier. And for the fiscal year 2013 that ended in September, Apple's revenue from iPads grew only 3%.

For Investors Only; Enerplus Is Going To Report A Huge Well

Disclaimer: this is not an investment site. Do not make any investment decisions based on what you read here or what you think you may have read here. 

Natural gas:  in addition to the SeekingAlpha article linked below, there is another SeekingAlpha article with a positive slant on Clean Energy Fuels  Westport Innovations.

Natural Gas: Don sent me a link to a SeekingAlpha story/interview with Ron Muhlenkamp. I invested in his fund for my older daughter's IRA; it returned 34.4% last year. After getting married, I believe the Muhlenkamp IRA was rolled into another plan, so I don't have any agenda with regard to this story. Years ago I wrote a personal letter to Ron Muhlenkamp thanking him for the wonderful fund he ran; he must be getting up in years, a real "greybeard" by now. Anyway, Ron has a nice interview regarding natural gas. See his comments on the Bakken and the Keystone pipeline.
Cheap natural gas means Americans can buy the equivalent of a barrel of crude for $35. That's the exciting reality that has Ron Muhlenkamp, founder and portfolio manager of Muhlenkamp & Co. Inc., putting his investment dollars behind the next great fuel switch, this time in the transportation sector. With his fund having finished 2013 with a tidy 34.4% gain, he is now eyeing companies poised to outfit the U.S. transportation sector with all things natural gas, from fuel tanks to motors to filling stations.
In transportation, the infrastructure to make the switch to natural gas has not been in place. We didn't have the filling stations or the trucks. Now, the trucks are just becoming available. You can buy pickup trucks from Ford Motor Co. and General Motors Co. that run on natural gas. Furthermore, Clean Energy Fuels Corp. has established natural gas filling stations coast to coast, every 250 miles on five different interstate highways.
Westport Innovations Inc. has been producing 9-liter [9L] natural gas engines. Waste Management uses 9L engines on garbage trucks and expects 85-90% of its new trucks to be natural gas-fueled. Westport has just come out with 12L engines, which are used for over-the-road trucks. I don't expect those engines to get adopted as fast as the utility industry made the switch to natural gas, but there has been a fairly rapid adoption in the waste management industry. I think we're on the cusp of a major trend.
This may not be an investment site, but it certainly should give folks some ideas to explore. I hold no shares in CLNE, probably never will, but it remains one of the more fascinating energy companies. If I was 25 years old and just starting out, this might be a good one to consider accumulating for the very long term. The long-haul truckers are getting "killed" with the cost of diesel.


Caterpillar beat by 26 cents.


Random look at Enerplus well in South Fork:
  • 24763, conf, Enerplus, Catfish 148-93-15D-16H, South Fork, middle Bakken:

DateOil RunsMCF Sold

After posting the above, a reader told me of the other two Enerplus wells on the same pad as the Catfish:
  • 24764, conf, Pumpkin 148-93-14C-13H TF, South Fork: 
DateOil RunsMCF Sold
  •  24765, conf, Tobacco 148-93-14C-13H, South Fork:
DateOil RunsMCF Sold


This must be some type of record: nearly 30 companies (29, to be exact, I think) declare increased dividend, including:
  • CMS Energy
  • Crestwood Midstream Partners
  • EQT Midstream Partners LP
  • Holly Energy Partners
  • Pacific Coast Oil Trust
  • PriceSmart
  • QEP Midstream Partners LP
  • Rose Rock Midstream
  • Sabra Healthcare REIT
  • Summit Midstream Partners
  • Tesoro Logistics LP
  • Valero Energy
  • Williams Cos (previously posted)
  • Wintrust Financial
  • Xerox Corp