Anything To Kill The Oil And Gas Industry

Reuters via Rigzone is reporting:

The White House said on Friday it will take a hard look at whether new regulations are needed to cut emissions of methane from the oil and gas industry, part of President Barack Obama's plan to address climate change.

Regulators will start by proposing new rules later this year to reduce venting and flaring from oil and gas wells on public lands, one way to begin slashing emissions of the potent greenhouse gas, said Dan Utech, Obama's top energy and climate aide.

Most oil and gas production takes place on privately owned land.

The Environmental Protection Agency is going to study this year whether additional broader regulations are needed for methane emissions under the Clean Air Act, Utech told reporters on a conference call.

If the agency deems more regulations are needed, they will be completed before Obama leaves the White House at the end of 2016. Obama has set he wants to cut U.S. greenhouse gas emissions to 17 percent below 2005 levels by the year 2020.

The only good thing: presidents come and go. Having said that, this suggests President Obama will never approve the Keystone XL 2.0 North.

Eagle Ford Gas Is Drawing Steelmakers To Texas' Coastal Bend (Corpus Christi)

Rigzone is reporting:

Upstream, midstream and downstream sectors of the oil and gas industry have long contributed to the economy of South Texas' "Coastal Bend," a 12-county region whose hub city is Corpus Christi. Not only is the region accessible to onshore and offshore oil and gas fields, but it boasts the infrastructure necessary to ship, store and process hydrocarbons and hydrocarbon products.

Lured by the region's growing port facilities and ready availability of cheap natural gas from the prolific Eagle Ford Shale play, two foreign-owned firms are bringing a newcomer – iron and steel manufacturing – into the Coastal Bend's economic fold.

"The addition of iron and steel manufacturing to the regions' economy will further diversify and strengthen our growing economy," said Roland Mower, CEO of the Corpus Christi Regional Economic Development Corp. "In fact, this region is experiencing an uptick in interest from international manufacturers interested in leveraging our low-cost, politically stable supply of natural gas as a fuel source for their manufacturing processes and our immediate proximity to the U.S. (Western Hemisphere) markets." 

While living in San Antonio for nearly twelve years, we often visited Corpus Christi and the surrounding area, especially to go birding. I always thought, economically, Corpus Christi seemed a bit depressed. This new steelmaking activity should really do wonders for the economy and employment. 

Random Note On Oasis Permit Inadvertently Omitted From Recent Daily Activity Report

Updates

April 4, 2014: see comments below. The "Pow" wells are for monitoring; they will not be producing wells. 
 

Original Post

In the March 27, 2014, file #28007 was overlooked. This is #28007:

• 28007, conf, Oasis, Straw Pow 5602 42-17, Bull Butte, 

I wouldn't have made a big deal of this except to note that a) this permit has no "H" designation" and b) based on siting of other wells in this oil fields, this permit is for a well in an unusual location if targeting the Bakken/Three Forks.

Note also this "Pow" well, reported January 25, 2014:

• 25763, drl, Oasis, Cornette Pow 5300 34-26, Willow Creek, no production data,

Oasis is known to be interested in testing the Lodgepole in this area.

From the well file of #19131, a Bakken horizontal in this same section:

The Lodgepole Formation top was drilled at 9,742 feet TVD. Approximately 581 feet (true vertical thickness) of argillaceous, skeletal lime mudstone were drilled in the Lodgepole Formation. Oil and gas shows were absent while drilling in the upper Lodgepole despite known fracture zones in the upper Lodgepole locally and no visible porosity was observed in samples. Fracture porosity is inferred near the base of the formation, and a 1,245 unit gas show along with a second, highter 1,673 unit recorded gas show were attributed to sourcing by fractures within the lower Lodgepole Formation.

It should be noted that some vertical wells in the Bakken are monitoring wells. 

The Williston Wire

No links; it is easy to subscribe to The Williston Wire.

This is quite a nice story; brings a lot of the past, present, and future together:  

The Williston Sea Lions will celebrate the grand opening of the new 50-meter Olympic sized pool at the Williston Area Recreation Center with an Olympic Gold Medalist!  Katie Ledecky, the swimming phenomenon who won the 800-meter freestyle during the 2012 Summer Olympics, will help dedicate the EJ Hagan, MD Natatorium, on Saturday, March 29, beginning at 10:15 a.m. The pool, which is housed in the Williston Parks and Recreation District's ARC, is named after Ledecky's grandfather, the late EJ Hagan.

Sean Hannity, host of Premiere Radio Networks' The Sean Hannity Show and FOX News' Hannity with Sean Hannity, will be a keynote speaker at the 22nd Annual Williston Basin Petroleum Conference. Hannity will join several oil and gas industry leaders and CEOs to address this year's theme, "Bakken Strong," and discuss the role oil and gas has in strengthening our state and nation's economy, job growth and energy security.

While Cash Wise grocery store is preparing to open in Tioga's north side, an adjacent strip mall is also taking shape.  Slated for occupancy in the 10,000 square foot strip mall is an Anytime Fitness franchise location, a China Express restaurant and a Cash Wise Liquor store, said Jay Moore of Oppidan Development.

Oil companies asked, and Sanford Health listened.  In a step to meet the tremendous challenge of providing health care in the booming oil fields of western North Dakota and eastern Montana and after working with leaders in the Bakken, Sanford Health is introducing an innovative new service - O.P.C. mobileMED. The service will provide health care services directly in the oil fields for oil-producing companies (O.P.C.) and their subsidiaries.  Sanford Health will deploy two mobile clinics on wheels and one modular clinic - initially in Watford City.

With no affordable rental housing available in Bainville, the school district is considering building two apartment buildings with two to four units each to accommodate housing needs for new teachers.  School trustees considered options during their monthly meeting recently.  As the oil boom spreads across the state line into eastern Roosevelt County, real estate and rental housing prices have risen due to the demand caused by oilfield workers looking for housing in Bainville and Culbertson and commuting to oilfield jobs at Sidney and Williston or farther.

For a group of self-described "over-educated and underemployed" young men from Minnesota, the lure of an "urban legend" is too great to ignore. That's why members of the team first came to the oil patch about 18 months ago and why they've returned this spring for another look. Everywhere in Minnesota, it seems, someone knows someone who went to the Bakken for a good-paying job, finding along with it high housing costs, long hours and a culture under siege.

International Manufacturing Company Buys Into The Bakken

This is a big story. When I was up in Williston last month, I learned about the huge oil tank manufacturing operations that are needed in the Bakken. The need has not been lost on others.

The Dickinson Press is reporting:

Steffes Corp. has announced the sale of its oil tank division in Dickinson to an Ohio company, according to a release sent out Friday afternoon.

The sale was made to Worthington Industries, a leading diversified metal processing company with annual sales of approximately $2.6 billion headquartered in Columbus, Ohio. Worthington operates 83 facilities in 12 countries, according to the release.

Fifteen (15) New Permits -- The Williston Basin, North Dakota, USA; CLR Reports Two More Atlanta Wells (Nice Wells); BR WIth Two Big Wells; XTO With A Big Well; XTO Reports An Old Red River Well Re-Entered As A Madison Well

Don tells me this is what the Statoil roughnecks are doing out in the North Dakota badlands after they bring in a "high IP" well:


Insane Fun (also good for clearing rock prior to digging for dinosaur bones)

Active rigs:

	3/28/2014	03/28/2013	03/28/2012	03/28/2011	03/28/2010
Active Rigs	194	186	206	169	105

Fifteen (15) new permits --

• Operators: Petro-Hunt (4), QEP (4), EOG (3), XTO (2), Fidelity (2)
• Fields: Charlson (McKenzie), Parshall (Mountrail), Grail (McKenzie), Murphy Creek (Dunn), Sanish (Mountrail
• Comments: the QEP Grail wells are two more Moberg wells

Wells coming off the confidential list were posted earlier; see sidebar at the right.

Seven (7) producing wells were completed:

• 23362, 604, CLR, Atlanta 11-6H, Baker, 4 sections, t3/14; cum --
• 23361, 407, CLR, Atlanta 12-6H, Baker, 4 sections, t3/14; cum --
• 24320, 581, CLR, Raymo 5-31H, Dolphin, t3/13; cum --
• 25908, 2,976, BR, CCU Columbian 43-1MBH, Corral Creek, unitized, t3/14; cum --
• 25907, 2,712, BR, CCU Columbian 43-1TFH, Corral Creek, unitized, t3/14; cum --
• 25838, 2,413, XTO, Duke 34X-31A, Siverston, t3/14; cum --
• 24321, 835, CLR, Raymo 4-31H, Dolphin, t3/14; cum --

Comment: these are really good IPs for CLR. Congrats to the roughnecks, again.
 
Recompleted well:

• 11485, 13/203, XTO, Wegley 20-1, originally a Red River well completed in 1986; 173K bbls through June, 2013; recompleted March, 2013, into the Madison, with an IP of 13;

April NDIC Hearing Dockets Are Posted -- The Williston Basin, North Dakota, USA

Disclaimer: this update was done quickly; there may be typographical errors. If something seems wrong, it probably is. See linked source for details and to check accuracy.

Link here to the NDIC site; I will post summary later. Quickly scanning through them, a few cases caught my eye(s):

Tuesday, April 22, 2014

Case No. 22058: In the matter of a hearing called on a motion of the Commission to consider amending the current Bakken, Bakken/Three Forks, and/or Three Forks Pool field rules to restrict oil production and/or impose such provisions as deemed appropriate to reduce the amount of flared gas.

Wednesday, April 23, 2014: case 22059 - case 22158 (15 pages)

22059, Whiting, Big Stick-Bakken, proper spacing, Billings
22060, Whiting, Sioux-Bakken, proper spacing, McKenzie
22061, Whiting, Lonesome-Bakken, proper spacing, McKenzie
22062, Cornerstone, Lostwood-Bakken, proper spacing, Burke
22063, OXY USA, Crooked Creek-Bakken, proper spacing, Dunn
22064, OXY USA, Willmen-Bakken, flaring, Billings, Dunn
22065, Oasis, Cottonwood, Sorkness and/or Alger-Bakken, establish 13 overlapping 2560-acre nits; 1+ wells; Mountrail
22066, Oasis, Alger and/or Baskin-Bakken, establish 9 overlappig 2560-acre units; 1+ wells; Mountrail
22067, Oasis, Missouri Ridge and/or Squires-Bakken, establish two overlapping 2560-acre units; 1+ wells; Williams
22068, Oasis, Alkali Creek and/or Robinson Lake-Bakken, establish 4 overlapping 2560-acre units; 1+ wells; Mountrail
22069, Oasis, Alkali Creek, establish an overlapping 2560-acre unit, 1+ well, Mountrail
22070, Oasis, Sanish-Bakken, establish 2 overlapping 2560-acre unit, 1+ wells, Mountrail,
22071, QEP, Grail-Bakken, establish 1 overlapping 2560-acre unit; 1+ well, McKenzie
22072, MRO, Bailey and/or Chimney Butte-Bakken, establish 4 overlapping 2560-acre units; 1+ wells; Dunn
21907, cont'd
14935, cont'd
22073, Hess, Capa-Bakken, establish 2 overlapping 2560-acre units, 1+ wells; Williams
22074, Hess, Alger-Bakken, establish an overlapping 2560-acre unit, 1 well, Mountrail
22075, Hess, Alkali Creek-Bakken, establish an overlapping 2560-acre unit, 1 well, Mountrail
22076, Hess, Robinson Lake and/or Alkali Creek-Bakken, establish 4 overlapping 2560-acre units; 1 wells, Mountrail
22077, Hess, Antelope-Sanish and Charlson-Bakken, establish an overlapping 2560-acre unit; 2 welsl; McKenzie
22078, Hess, Antelope-Sanish, establish a 2560-acre unit, 20 wells, McKenzie
22079, Hess, Westberg-Bakken, authorize up to 11 wells on a 1280-acre unit; establish an overlapping 2560-acre unit, 1 well; McKenzie
22080, Hess, Blue Buttes-Bakken, establish an overlapping 2560-acre unit, 1 well, McKenzie
22081, Hess, Ellsworth-Bakken, establish an overlapping 2560-acre unit, 2 wells, McKenzie
22082, Hess, Ellsworth-Bakken, flaring, McKenzie
22083, Hess, Juniper-Bakken, 6 wells on a 1280-acre unit; establish an overlapping 2560-acre unit for 2 wells; McKenzie
22084, True Oil, Red Wing Creek-Bakken, establish two 1280-acre units; 4 wells on each; McKenzie
22085, SM Energy, Charlson-Bakken and the Keene-Bakken/Three Forks, establish 2 overlapping 2560-acre units; 1 well, McKenzie
22086, SM Energy, Grassy Butte 21X-21F well be be completed in and produce from the Tyler Pool as an exception to the ...
22087, SM Energy, Ambrose-Bakken, flaring, Divide
22088, SM Energy, Colgan-Bakken, flaring, Divide
22089, SM Energy, West Ambrose-Bakken, flaring, Divide
21920, cont'd
19399, cont'd
21809, cont'd
21810, cont'd
22090, Gadeco, Epping-Bakken, determine value of gas flared in violation of code, Williams
21799, WPX, revoke an Enerplus permit, Dunn County
21800, cont'd
22018, cont'd
22091, Prairie Disposal, disposal
22092, Tervita LLC, disposal
22093, Mud Tech, disposal
22094, Dad Convergyx, treating plant
21928, cont'd
22054, cont'd
22095, SM Energy, pooling
22096, Sm Energy, pooling
22097, SM Energy, pooling
22098, SM Energy, pooling
22099, SM Energy, pooling
22100, SM Energy, pooling
22101, SM Energy, pooling
22102, SM Energy, pooling
22103, SM Energy, pooling
22104, SM Energy, pooling
22105, SM Energy, pooling
22106, SM Energy, pooling
22107, SM Energy, pooling
22108, SM Energy, pooling
22109, SM Energy, pooling
22110, SM Energy, pooling
22111, SM Energy, pooling
22112, SM Energy, pooling
22113, SM Energy, pooling
22114, SM Energy, pooling
22115, SM Energy, pooling
22116, SM Energy, pooling
22117, SM Energy, pooling
22118, SM Energy, pooling
22119, Petro-Hunt, pooling
22120, Petro-Hunt, pooling
22121, Petro-Hunt, pooling
22122, Petro-Hunt, pooling
22123, Murex, McGregor-Bakken, 8 wells on a 1280-acre unit, Williams
22124, KOG, pooling
22125, KOG, Truax-Bakken, 20 horizontal wells on each of three (3) 1280-acre units (60 wells), Williams County,22126, Oasis, Bonetrail-Bakken, 8 hz wells on each 1280-acre unit (24 wells), Williams
22127, Oasis, Alger-Bakken, 16 wells on a 640-acre unit, Mountrail
22128, Oasis, Camp-Bakken, 15 wells on a 1600-unit, McKenzie
22129, Oasis, North Tobacco Garden-Bakken, 18 wells on each of two (2) 1280-acre units, McKenzie
22130, Oasis, North Tobacco Garden-Bakken, 18 wells on each of two 120-acre units, McKenzie
22131, Hess, Sandrocks-Bakken, 10 wells on a 1280-acre unit, McKenzie
22132, Hess, Hawkeye-Bakken 11 wells on a 1280-acre unit, McKenzie
22133, Hess, Cherry Creek-Bakken, 6 wells on each of 2 1280-acre units, McKenzie
22134, QEP, pooling
22135, QEP, pooling
22135, QEP, pooling
22137, QEP, pooling
22138, QEP, pooling
22139, QEP, pooling
22140, QEP, pooling
22141, QEP, pooling
22142, QEP, pooling
22143, QEP, pooling
22144, MRO, pooling
22145, MRO, pooling
22146, MRO, pooling
22147, MRO, commingling
22148, MRO, commingling
22149, MRO, commingling
22150, MRO, commingling
22151, MRO, commingling
22152, OXY USA, Fayette-Bakken, 12 wells on each of two (2) 1280-acre units, Dunn
22153, OXY USA, Willmen-Bakken, 12 wells on each of two (2) 1280-acre units, Dunn
22154, OXY USA, Manning-Bakken, 12 wells on each of two (2) 1280-acre units, Dunn
22155, Luff, pooling
22156, Crescent Point, Colgan-Bakken 9 wells within a 1600-acre unit, Divide
22157, Newalta Corp, SWD
22158, Buckhorn Energy, SWD
 

 Thursday, April 24, 2014: case 22159 - case 22275 (24 pages)

22163, Samson Resources, Blooming Prairie-Bakken, create a 1280-acre unit, 7 wells, Divide
22170, Corinthian, create four 320-acre units, Spearfish/Madison Pool and/or formation of the Scandia, Soruis and/or Lesje oil fields, one well on each unit; Bottineau
22171, XTO, Haystack Butte, North Fork, Lost Bridge and/or Little Knife-Bakken; create 15 overlapping 2560-acre units; one well each; McKenzie, Dunn
22173, Liberty Resources, Stoneview and/or North Tioga-Bakken, create an overlapping 2560-acre unit; twenty-six (26) wells on that unit, Divide
22174, Liberty Resources, Temple and/or McGregor-Bakken, create three overlapping2560-acre units; twenty-six (26) wells on each of the three units; Williams
22014 (cont'd), WPX, Mandaree-Bakken, create an overlapping 2560-acre unit, twenty-eight (28) wells on that unit, Dunn, McKenzie
22234, Crescent Point, Wheelock-Bakken, 8 wells on an existing 640-acre unit,Williams
22240, XTO, Heart Butte-Bakken, 10 wells on an existing 1280-acre unit, Dunn
22241, CLR, Elm Tree-Bakken, 28 wells on each of two existing 2560-acre units, McKenzie, Mountrail

For Investors Only -- CLR Trading At A New High; Natural Gas Storage In The Bakken Formation

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.

Midday market notes:

• trading at new highs: CLR, BHI, CRR, EOG, HP, SLB, 
• many others of interest trading near new highs
• oil holds unto its recent gains; solidly over $101

By the way, this is why this is not an investment site. Based on news coming out only last week, I would have advised folks to sell CLR. Even UBS downgraded CLR on March 6, 2014, and I would assume those guys and gals are pretty smart.

Carbo Ceramics is surging over 4% today, almost up $7. Mike Filloon suggested sand would go parabolic this year; was anyone listening? I hope so.

SLB is on its way to a $100-stock. BHI is up over 2%. This is just after oil companies said they were going to "crack the whip" on oil service companies.

It is not the Crimean that is driving the price of WTI oil. It's something else, and I posted that "something else" earlier today.

By the way, Brian just sent me an incredible link. Here is the link:

http://www.albertaoilmagazine.com/2014/03/horizontal-revolution-eor/

... and here is his comment:

Article is about injecting natural gas back into the Bakken formation to recover more oil. Imagine a salt dome storage in North Dakota. Use the natural gas for EOR and reduce flaring. Rarely do you get a win-win (or a "twofer") like that. This should add value to the willingness to store more natural gas.

When I get a chance, this is worthy of a stand-alone post.

There are many ways to skin a cat. I thought the only solution to natural gas was gathering and processing; it looks like one could inject it directly back into the "Bakken salt dome." I wouldn't think it would have to be processed; simply gathered and re-injected into the ground where it came from.

Hey, by the way, look at that first paragraph in that linked story. What do you recall was the percent of recovery in primary production from the Bakken? Yes, you are correct. Initially we were told about two (2) percent. Then even I, layperson, could see they were getting 3 to 5% and there were hints in corporate presentations that primary production might be as high as 8%. But did anyone ever see a 15% primary recovery rate bandied about? I don't think so.

This speaks volumes why operators have paid upwards of $20,000 and even more for mineral acreage in the Bakken. If you were doing your analysis based on 5% recovery, think what 8% means. Think what 15% means.

This is why I can never sleep in late in the morning; I am too excited to see what news is coming out of the Bakken.

ObamaCare

Updates

September 1, 2014: Mark Perry, Carpe Diem, is reporting that 2008 - 2014 (six years) was a laboratory experiment in Keynesian economics. He says it was a gross failure and Keynesian economics is now dead. The good news: Keynesian economics is dead; a lot more people are now educated in economics. (In fact, I think Keynes argued for government stimulus as a short term response to a major recession/depression. I don't think he would have argued that it go on for a decade, which now seems like how long it will go.)

Later, 1:30 p.m. central time: FiscalTimes sees ObamaCare the same way I do in several respects -- a) haves and have nots; b) shopping blind -- one does not what one is buying when signing up (which hospitals accept your policy; which don't; c) largest e-commerce plan ever rolled out without beta-testing.

Later, 11:08 a.m. central time: I just got back from walking/running with my older granddaughter for her monthly "Fitness Friday." This afternoon, I will walk/run with my younger granddaughter. Classrooms score points for each lap each student earns. The students collect points from their family family members (parents, grandparents) who also run.

When I returned, I noted I had received e-mail and comments from folks regarding their concerns with ObamaCare.

A reader was concerned when she heard that the "surge" resulted in six million enrollees in the least few days. That headline was misleading. The total number enrolled, according to the government, is six million (the surge simply put them over "the top"). In fact, that was a fail: the original goal was 7 million (see Yahoo!Finance). And even 7 million was a huge fail. When Obama/Hillary were fighting it out for the nomination, they were talking about 30 million and, even, 46 million uninsured Americans. And, of course, those were lies, also. Be that as it may.

ObamaCare was never about insuring the uninsured. It was all about saving corporate America. I just talked about that earlier this week. This was a huge godsend for corporate America. In the investing arena, ObamaCare is a godsend. Investors will gain from this.

In the political arena, ObamaCare was a huge opportunity for fraud/scam/cronyism and politicians took advantage of the opportunity. If your Senator or representative failed to take advantage, shame on them.

In the macroeconomic arena, this was nothing more than Keynesian government stimulus -- something I would have known nothing about had I not read Sylvia Nasar's recent book. And this new stimulus money -- ObamaCare money will come just at the right time, just as the Fed continues tapering.

In the health arena, I don't know any sector in America that was so broken. Yes, the US had the greatest health care system in the world, but compared to all sectors in the US. the health care sector is really broken. Whether ObamaCare will make it worse/better, only time will tell. But already there are stories that nimble entrepreneurs are finding ways to improve the system. I'm not talking about the actual health care -- that was never broken. I'm talking about the administrative side and the bureaucratic side of medicine. I posted a story on that the other day. If I run across it again, I will link it here.

So much more, of course, could be written. I will continue to post ObamaCare stories, but I'm taking a page from JFK: I'm not worrying about things I cannot change. But as an investor, I am looking for some very positive things to come out of ObamaCare.

The Yahoo!Finance story linked above says taxpayers are on the hook for $1.6 trillion. I can't get my arms around huge numbers. I don't even know how accurate $1.6 trillion is. So, let's compare $1.6 trillion with other big numbers. Corporate America holds $1.5 trillion in cash. (And a lot of corporations could hold more cash if they so desired). The GDP for the US is over $17 trillion.

For me, reading Sylvia Nasar's book has helped me put a lot of this into perspective. A lot of very, very smart folks invest in the market. A lot of very, very smart folks have been following the ObamaCare story. ObamaCare recently celebrated its fourth anniversary. It was hard not to make 30% in one's mutual fund in 2014. The market is even for the year right now but it certainly seems poised to have another good year. I think the oil and gas sector will be quite remarkable 1Q14 (Jan - Mar, 2014). It's just hard for me to believe that the market would be doing this well if ObamaCare was as big a threat as some folks suggest it will be.

I am not a supporter of ObamaCare. I detest the whole way it was legislated and executed. But I feel very, very comfortable, corporate American is going to do very, very well under ObamaCare. As an investor, that trumps my political / emotional anxiety and worrying about things I cannot change.

Rush Limbaugh says ObamaCare is all about "transfer of wealth." He is correct. It is a transfer of wealth from non-investors to investors (as corporate America cost shifts employees over to ObamaCare). But Rush doesn't mean that: he means a transfer of wealth from the rich to the poor. That's not particularly new: much of what our government does is transferring wealth from rich to the poor. The question is to what extent and whether it's good or bad. 

Original Post

Wow, look at the market. Happy days are here again. It's all that stimulus money going coming out of ObamaCare. EOG surges; trading at a new high; closing in on $200/share; oil is up. Big Oil is all up. "All" Bakken operators up. CLR up $3.00.

**********************************

Disclaimer

Again for newbies: I post a lot of stuff -- new stand-alone posts as well as updating older posts in a short period of time. I expect there will be a lot of typographical errors that I will find/correct later.

This is not an investment site. Do not make any investment decisions based on anything you read here or think you may have read here.

The site is for my use only but if folks happen to stumble upon it and want to read it, that's fine with me. But read it at your own risk. I try to link most information. If you think something I post is wrong, it probably is. Go to the source.

The site is for education and entertainment, not necessarily in that order.

All comments are moderated; I generally post comments only if they add something to the discussion and generally only if they relate to the Bakken.

US Utilities And Solar Energy

This is one of the joys of blogging, connecting some dots. Regular readers know the challenges electric utilities in Germany are having with residential roof solar energy. I've always assumed American utility companies were watching closely to see how that played out in Europe. NRG has been watching. From Yahoo!In-Play:

NRG Energy's solar portfolio surpasses 1,200 megawatts: Through its subsidiaries including NRG Yield (NYLD) and NRG Solar, one of the nation's largest solar developers, now owns and operates more than 1,200 megawatts (MW) of solar capacity. Through these facilities, NRG helps power nearly one million homes at full output with clean, renewable solar energy, which is helping reinvent the US energy ecosystem.

And this:

I posted this story in a short blurb yesterday. There are a lot of story lines in this article. The biggest story line: US utilities have learned from the utility debacle in Germany.

NRG Energy Inc. is continuing to expand its grasp on the household energy market by acquiring one of the top rooftop solar installation companies.

NRG, which has co-headquarters in Houston and New Jersey, is buying New Jersey-based Roof Diagnostics Solar to grow its foothold in energy renewables as well as to, according to NRG, empower "customers to control their own energy destiny through clean self-generation."

This has nothing to do with "helping the customer." This has everything to do with survival.

Natural Gas Drawdown

This is a pretty startling report. Don noted it; sent it my way. Asked why we don't hear more about it.

Working gas in storage was 896 Bcf as of Friday, March 21, 2014, according to EIA estimates. This represents a net decline of 57 Bcf from the previous week. Stocks were 899 Bcf less than last year at this time and 926 Bcf below the 5-year average of 1,822 Bcf.

In the East Region, stocks were 419 Bcf below the 5-year average following net withdrawals of 39 Bcf. Stocks in the Producing Region were 378 Bcf below the 5-year average of 754 Bcf after a net withdrawal of 15 Bcf. Stocks in the West Region were 129 Bcf below the 5-year average after a net drawdown of 3 Bcf. At 896 Bcf, total working gas is below the 5-year historical range.

[Later: a reader says the drawdown was just as severe in Canada.]

My thoughts (unedited, and not ready for prime time):

With regard to no one talking about the natural gas drawdown, a couple of things. CNBC is as good a gauge we have in what passes for business news.

CNBC, except for a bit of new business news on the two early morning shows, is completely scripted by the producer. It has to be scripted; they have to line up guests, set up telephone interviews, etc. and that all takes time. The guests, themes are established at least three days in advance, so as to give time to get everything in order. They can't react quickly to routine reports.

Second, and this is most important: CNBC and all the news outlets are NYC-based, or East Coast based. They have a NYC / East Coast mentality. They grew up with banking and pharmaceuticals. And that's about it. They have no background in the oil and gas industry. The business schools are all economics, banking, consulting. Almost nothing about oil and gas. It is really quite amazing.

That's all opinion. Everyone is entitled to an opinion. LOL.

Global Free Market Capitalism

Put these two stories side-by-side:

• Californians are now paying, on average, more than $4 per gallon of regular gasoline (reported and linked earlier this morning). That story is a headline in the Los Angeles Times.
• Meanwhile, US exports of diesel fuel have gone up 300% since 2009 and US gasoline exports have increased five-fold since 2009 (posted and linked earlier this morning). That amazing fact does not get a headline in the The Los Angeles Times.

Does it matter that the US bans oil exports? I track "big stories" here.

Refinery utilization rates here.  In August, 1998, refinery utilization rate reached 99.9% (almost hard to believe). Between 1993 and 2007, utilization rate was generally above 92% but before 1993 and after 2007, the utilization rate was clearly below 92%. The current trend is rather subtle: the rate has been fairly stable over the past few years but well above the 75% low in September, 2008. This is way beyond my comfort level, but if refinery utilization rate can hit 98% (as it did in 1998), and current refinery utilization rate is 92%, there is a bit of room for growth. When it comes to the large numbers in diesel and gasoline production, one would think that even a one-percent change would drop to a refiner's bottom line.

For Investors Only

This is probably the reason for recent rise in price of oil:

TransCanada’s Gulf Coast Pipeline continues to drain the inventory at the Cushing, Okla., hub, pushing levels to the lowest amount since early 2012, according to the Energy Information Administration.

The inventory was less than 29 million barrels on March 21, some 20 million barrels lower than a year ago.

Cushing is the delivery location for the West Texas Intermediate crude oil futures contracts. The 485-mile, 36-inch diameter pipeline started delivering 700,000 barrels per day of crude oil from the hub to refineries on the Texas coast in January.

The next story to follow: refinery utilization, new refineries along the coast. Gasoline and diesel exports are already soaring.

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I posted this story in a short blurb yesterday. There are a lot of story lines in this article. The biggest story line: US utilities have learned from the utility debacle in Germany.

NRG Energy Inc. is continuing to expand its grasp on the household energy market by acquiring one of the top rooftop solar installation companies.

NRG, which has co-headquarters in Houston and New Jersey, is buying New Jersey-based Roof Diagnostics Solar to grow its foothold in energy renewables as well as to, according to NRG, empower "customers to control their own energy destiny through clean self-generation."

This has nothing to do with "helping the customer." This has everything to do with survival.

NRG Energy's solar portfolio surpasses 1,200 megawatts : Through its subsidiaries including NRG Yield (NYLD) and NRG Solar, one of the nation's largest solar developers, now owns and operates more than 1,200 megawatts (MW) of solar capacity. Through these facilities, NRG helps power nearly one million homes at full output with clean, renewable solar energy, which is helping reinvent the US energy ecosystem.

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

Futures (6:49 a.m. central time): Dow up 29, trending lower. WTI oil up 41 cents. 

Libyan protesters block pipeline to port.

Canadian Pacific expresses extreme disappointment with Canadian Government legislation: Co expresses its extreme disappointment with the legislation tabled yesterday afternoon in Ottawa by the Government of Canada.
Co states:

"CP believes that the government has unfortunately chosen to introduce legislation which will do nothing to increase supply chain capacity in the grain handling system, will not move more grain to markets more quickly, and has the potential to cause great damage to the Canadian rail transportation system...Targeting the railways when our dedicated men and women are working 24/7 to recover from some of the harshest winter operating conditions ever seen, is not only ineffective but grossly unfair...CP also believes that the expansion of regulated interswitching could seriously impact Canada's competitiveness as it effectively transfers traffic that normally would move over Canadian railways and ports, to U.S. railroads and ports, potentially resulting in job losses, reduced investment and the dampening of the Canadian economy.  Interswitching will also lead to double handling of grain shipments which will slow down the grain supply chain negatively impacting transit times...

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Sylvia Nasar's Grand Pursuit: The Story of Economic Genius

I continue to read the book. I will probably finish it in the next few days. 

I am up to the US economy immediately following WWII. Fascinating. It is so interesting to see how difficult it is to predict what the economy will do. The big concern for the US  after the war was rampant unemployment with the demobilization of millions of troops.

But what Samuelson had failed to foresee was the magnitude of pent-up demand by consumers, starved for houses, cars, appliances, and other appurtenances of middle-class life and with plenty of savings in the bank. His embarrassingly wrong prediction slowed the spread of Keynesianism in academe, he always believed. Being disastrously wrong early in one's career was in some ways a salutary experience for someone who hated making mistakes and rarely did. It left Samuelson more skeptical of economic forecasts and more circumspect in the claims he made for policies he favored or opposed. 

Demobilization became a bonanza for American colleges, MIT and its embryo economics department included. The only economic bill of rights that congress passed in the wake of FDR's 1944 exhortation was the GI Bill. But that measure had a large and lasting effect on the postwar economy.

For someone who knows absolutely nothing about economic theory, this is a great book to read. Very easy to read, and well written.

What I particularly enjoy are all the literary references Ms Nasar makes, for example:

As soon as the conference disbanded, Hayek set out for Vienna. The condition of the city and its inhabitants was far worse than anything he had been able to imagine. Under occupation by the four allies for three long years, Vienna was as seedy, demoralized, and dark as it would appear to audiences who saw The Third Man, the film noir written by the English novelist Graham Greene, with its immortal line, added by the director and star, Orson Welles: "In Italy for thirty years under the Borgias they had warfare, terror, murder, bloodshed -- they produced Michelangelo, Leonardo da Vinci, and the Renaissance. In Switzerland they had brotherly love, five hundred years of democracy, and peace, and what did they produce? The cuckoo clock."

I've only read a few Graham Greene novels, but I've read the three-volume biography of Graham Greene. 

What Word Is Missing In This Op-Ed?

From today's WSJ: America Inc.'s profit margins have hit another record. Be careful what you wish for. 

Chief among the factors contributing to profit-margin expansion is the tight lid companies have put on costs. They have been slow to hire and slow to raise wages. Inflation has outpaced gains in private-sector employee compensation over the past five years, according to the Labor Department.

Spending on new equipment has been muted, too. Aggregate capital expenditure for members of the broad S&P 1500 index has grown by just 0.8% annually over the past five years, according to S&P Capital IQ. Low rates have allowed many companies to refinance debt, cutting interest costs. The effective yield on investment-grade corporate debt, according to the BofA Merrill Lynch Corporate Master index, is now 3.1%, versus 5.8% in December 2007.

Taxes have been low as well, in part as companies offset them with losses taken during the recession. Income statements from companies in the S&P 500 showed an effective tax rate, including state and local taxes, of 29% in 2012 versus 32% in 2007, according to ISI Group's David Zion. He calculates that their cash tax rate—what they actually paid—was 25% in 2012, against 31% in 2007.

Keeping costs low by refraining from hiring or not replacing equipment can only be done for so long, though. And long-term interest rates look more likely to rise than fall over the next year. Losses to offset taxes, too, eventually get used up.

The missing word is ObamaCare. Companies will cost shift their employees to health care. Not only does this lower health care costs for corporations (better profit margins) but much more importantly, ObamaCare provide predictability for US corporations.

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In other ObamaCare news --

ObamaCare could end health insurance providers as we know them. The Fiscal Times is reporting:

The problems with the implementation of the Affordable Care Act may be masking another major change in the way health care is delivered to U.S. consumers, experts believe.

At The Atlantic's Health Care Forum in Washington on Thursday, health care and business professionals said that there’s an increasing trend in the industry toward cutting insurance companies out of the process entirely, as large, regional hospital systems move into the insurance business.

Dr. Kenneth L. Davis, CEO and president of Mount Sinai Health System, the largest health care provider in the state of New York, said that starting next year, Mt. Sinai will begin offering its own Medicare Advantage plan. It will look for other opportunities to bring premium payments directly into the hospital system, rather than filtering them through insurance companies.

Davis said he expects organizations similar to his to move in the same direction.

“Inevitably the large systems are going to move to take part of the premium dollar,” he said.

Japan's Answer To Fukkushima: Coal Power; 47 Gigawatts In Ten Years; 20% More Than Pre-Fukushima

Link here to The Wall Street Journal.

Japan is turning into a rare bright spot in the world coal market, stepping up coal-fired power generation to replace nuclear plants that went offline after the 2011 Fukushima accident.

Plans by Japanese companies to spend billions of dollars on new coal-fired plants offer a striking contrast with the U.S., which has effectively blocked new coal plants using existing technology over concerns about global warming.

And they show how deeply Japan's energy picture has changed since the March 2011 earthquake and tsunami caused meltdowns at Fukushima Daiichi nuclear reactors.

On Thursday, Kyushu Electric Power Co. said it would restart a long-frozen project to build a one-gigawatt coal-fired unit in southern Japan. Other utilities including Tokyo Electric Power Co. have announced similar plans for more coal-fired power.

If the plans all come to fruition, Japan's coal-fired power capacity would increase to around 47 gigawatts over the next decade or so, up 21% from the time right before the Fukushima accident.

Not trivial. Not trivial at all. US consumers are going to have to spend a lot of money on wind and solar to cut CO2 emissions to balance all the new Japanese CO2 emissions. The increase use of coal in Japan is a pittance compared to what is contemplated in China and India. Repeat chorus: US consumers are going to have to spend a lot of money on wind and solar to cut CO2 emissions to balance all the new Japanese CO2 emissions. 

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Where Fools Rush In, Rick Nelson

Diesel, Gasoline Exports Soaring -- March 28, 2014

Updates

December 29, 2016: I think this is a most under-reported story -- soaring US gasoline, diesel exports. A story within this story is the soaring gasoline (and I assume diesel) exports to Mexico. This is a most incredible story. It started with a story on gasoline lines in northern Mexico. Then a couple days later, a story that a) gasoline consumption was soaring in Mexico; and, b) the country's integrated oil company (Pemex) could not keep up. Mexico was the world's 6th largest consumer of gasoline as recently as 2012, but has now jumped to #4. If things were not bad enough, because of Mexico's financial difficulties, the country will cut funding to Pemex, thus exacerbating the supply-demand situation. In the western hemisphere, this has to be among the top 5 energy stories in 2016. 

November 2, 2016: embedded chart. From 1 million bopd in 2008 to almost 6 million bopd now.

Original Post

RBN Energy: a must-read. "We" may not be exporting a lot of oil, but the diesel and gasoline exports are soaring.

Gulf Coast exports of diesel and gasoline are booming. Net exports of diesel have increased over 300 percent from an average of 232 Mb/d in 2009 to 746 Mb/d in 2013. Over the same period net gasoline exports from the Gulf Coast increased five-fold from an average of 87 Mb/d in 2009 to 439 Mb/d in 2013. Today we look at the drivers behind this dramatic export growth.

This blog is the first in a two part series looking at the drivers behind increased US exports of refined products from the Gulf Coast region. In this first episode we look at whether refining margins for diesel and gasoline are correlated to the level of exports. We then look at the extent to which export volumes are related to levels of refinery throughput at the Gulf Coast. In the next episode we will look at the impact of domestic demand for refined products (or the lack of it) on export volumes and then whether export volumes seem to be sensitive to international refined product prices.

Active rigs:

	3/28/2014	03/28/2013	03/28/2012	03/28/2011	03/28/2010
Active Rigs	195	186	206	169	105

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The New York Times

Russian sanctions could hurt Big Oil. Read the article; then ask yourself -- what was the hidden agenda? The New York Times is a huge supporter of President Obama; The Times is no friend of Big Oil. What was the hidden agenda? XOM was up almost 2% yesterday; COP was up almost 1% yesterday; CVX was flat.

The Wall Street Journal

Top story, front page: Russian border buildup stokes worries. There is some irony here: as Barack Obama cuts back the military, brings the forces home, Putin is filling the void. Predictable.

I guess the "key threshold moved." I thought it was 7 million. Whatever. The Barack administration says 6 million enrolled. And just last month the administration said they had no idea how many enrolled. The numbers are as meaningless as the unemployment numbers. The difference: we have earnings reports from the big insurers in 3Q14, 4Q14, and 1Q15. I can hardly wait to see what the new premiums will be for 2014 (I assume whatever they are, the president will cap them to this year's level).

Yesterday I made a comment regarding the market this year. And I noted that this is not an investment site, warning folks not to make decisions based on what they read here or what they think they might have read here. But today, a front section article in The WSJ says US corporate profits hit new highs last year, driven by the tight lid firms have kept on hiring and spending almost five years into the economic recovery.

A great article on how colleges will respond to unionized football's implications.

Chris Christie's lawyers says he is innocent. Well, duh.

Politically correct: top US military officer wants military to rethink ethics training. Starts with the commander in chief.

Obama seeks to repair Saudi ties. Political theater. I wouldn't read the article even if I had the time.

A portrait of the Malaysian Air pilots. I always said that's where investigators needed to look.

IMF will loan the Ukraine $18 billion. Here we go again.

Out of the closet. Microsoft brings out Office software for iPad. Speaks volumes. Microsoft will use the "old Ma Bell" business model -- rent.

Full use of the Office iPad app is limited to subscribers to Office 365, an online-friendly version that users "rent" for an annual subscription rather than buy to install on their computers. For consumers, Office 365 costs $99.99 a year.

Versace profit surges as sales strengthened. Lululemon reports higher sales.

Reported yesterday: Baxter to split into two companies.

Cargill plans to exit its division that trades global coal as well as European power and gas. It will create a new venture with a Brazilian company to combine global sugar-trading activities.

Japan's answer to Fukushima: coal power. 

Heard on the street: America Inc.'s profit margins have hit another record. Be careful what you wish for. 

Chief among the factors contributing to profit-margin expansion is the tight lid companies have put on costs. They have been slow to hire and slow to raise wages. Inflation has outpaced gains in private-sector employee compensation over the past five years, according to the Labor Department.

Spending on new equipment has been muted, too. Aggregate capital expenditure for members of the broad S&P 1500 index has grown by just 0.8% annually over the past five years, according to S&P Capital IQ. Low rates have allowed many companies to refinance debt, cutting interest costs. The effective yield on investment-grade corporate debt, according to the BofA Merrill Lynch Corporate Master index, is now 3.1%, versus 5.8% in December 2007.

Taxes have been low as well, in part as companies offset them with losses taken during the recession. Income statements from companies in the S&P 500 showed an effective tax rate, including state and local taxes, of 29% in 2012 versus 32% in 2007, according to ISI Group's David Zion. He calculates that their cash tax rate—what they actually paid—was 25% in 2012, against 31% in 2007.

Keeping costs low by refraining from hiring or not replacing equipment can only be done for so long, though. And long-term interest rates look more likely to rise than fall over the next year. Losses to offset taxes, too, eventually get used up.

This article conveniently forgets one word.

The Los Angeles Times

March Madness: Florida (1) beats UCLA (4). Arizona (1) beats SDSU (4). Wisconsin (2) beats Baylor (6). Dayton (11) beats Stanford (10). Every win was a blowout. Four games on tap tonight. Update on the president's bracket.

Not good news for the president: as Syria civil war drags on, the rebels are clearly losing. With Putin now in the cat-bird's seat, Syria sees clear sailing. I haven't heard a peep out of the administration, lately, on Syria.

Average gasoline price in California hits $4 a gallon. For the first time in months, most Californians are shelling out more than $4/gallon for regular gasoline. And with the busy summer driving about to begin....

The president and the Pope find safe ground on which to talk: the poor. Michelle and the girls are still vacationing in China as far as I know.

University of California head -- Napolitano -- throws cold water on the online education craze. Well, duh. I don't even have to read the article to know what that's all about.

The Dickinson Press

All that talk about an airport for Medora. Never mind.