Another Story I Missed: Break-Even Point In The Bakken -- $60

Wood Mackenzie report in The Boston Herald. 

Put the Bakken in perspective: Argentina, China -- Wood Mackenzie.

Reuters is reporting:

New efficient drilling practices may drive breakeven rates in the best areas of the Bakken shale oil play as low as $58 per barrel, Wood Mackenzie said on Tuesday, far lower than the traditional $70 per barrel figure frequently touted by analysts.

The fast adoption of multi-well pad drilling, or the ability to drill several wells from one location, should reduce the average cost per well to $7.5 million on average in 2014, allowing companies to make more off each barrel of oil, Wood Mackenzie analyst Jonathan Garret said. 

"The major driver of (well cost) reduction has to do with the number of wells drilled from pads," Garret said. "You're now drilling 3, 4, 12, even 16 wells from a single pad." 

This year, more than 90 percent of wells drilled in the Bakken will be drilled from multi-well pads, Garret said. Multi-well pad drilling is more efficient by reducing the amount of time it takes to drill each well as well as the equipment used. 

A Wood Mackenzie report issued on Monday estimated breakeven costs based on sub-plays. Breakeven rates in the Sanish basin, one of the best areas of the play, are expected to average $58 per barrel, while breakeven costs in the Nesson anticline are forecast to be $61 per barrel.

I'm quite impressed the analysts can see a $3-difference between the Sanish and the Nesson anticline.

By the way, everything I've read in corporate presentations, suggest the break-even point is a lot lower than $60/bbl.

In addition, price of oil would have to remain lower than the break-even point for a sustained period of time for it to have an effect on the Bakken. I assume the analysts also factor in the price cost of oil support services. As oil drops in price, operators demand more efficiencies from their support services. Obviously cost of leasing has gone way down and a lot of roads to all those existing pads have already been built.

Other "Wood MacKenzie/Bakken" Stories

OGFJ is reporting: 

The Bakken and Three Forks plays hold close to $118 billion in remaining value and, unlike other key plays, every single Bakken sub-play generates positive returns, according to Wood Mackenzie's latest key play analysis.

“We expect Bakken/Three Forks oil production to average 1.1 million barrels a day (b/d) in 2014, growing to 1.7 million b/d in 2020,” said Jonathan Garrett, Americas upstream research analyst for Wood Mackenzie.

Garrett explained that, today, the Bakken produces more crude oil than any other unconventional play in the world and $15 billion will be spent on drilling and completion this year. 

Wood Mackenzie analysis shows that operators will recover more than 20 billion barrels of oil reserves throughout the life of the play, and, contrary to recent concerns, infrastructure constraints are not expected to delay the play’s future development.

Other key findings in that study:

• Wood Mackenzie divides the Montana/North Dakota Bakken into 12 sub-plays
• CAPEX in the Bakken for drilling in 2014: $15 billion, second only to the Eagle Ford
• wells now average $7 - 8 million/well; vs more than $10 million prior to 2011
• highest IPs are seen on the Nesson Anticline
• highest EURs are in the Fort Berthold sub-play at nearly 700,000 boe
• the Three Forks is the primary drilling target in the Southern Fringe sub-play
• the three Forks wells have actually outperformed those in the Bakken in this sub-play
• Three Forks wells are better than middle Bakken wells in North Williston sub-play andthe Williams Perimeter sub-plays
• CLR remains the top operator in the Bakken, 1.2 million acres; largest remaining reserves; most advanced delineation program in the deeper Three Forks benches
• some players, like WPX, have more valuable positions on a per-acre basis
• some of the most valuable positions are concentrated in areas such as Fort Berthold
• CBR accounts for 73% of oil that leaves the Williston Basin
• total rail capacity has hit 1.2 million bbls/day
• pipeline and local refinery capacity is at 783,000 bbls/day

The Oil and Gas Investor:

• Edinburgh, U.K.-based Wood Mackenzie Ltd. is an energy and metals industry consultancy group working internationally.

Global Warming Forces Coal Industry To Raise Estimates Of Coal Production; Refiner Gets Okay To Re-Export Canadian Oil

I can't make this stuff up.

Reuters is reporting:

Consol Energy Inc raised its coal production outlook for the year, on strong demand from power companies.

Increased demand for power after a severe winter in the United States, a dip in inventory levels at utilities and a ramp up in natural gas prices are boosting demand for thermal coal.

U.S. coal miners Alpha Natural Resources Inc and Arch Coal Inc flagged an expected recovery in thermal coal markets earlier this year.

I've heard through the grapevine that Algore lost bundles shorting coal. Or maybe he made bundles investing in coal. I forget. Actually I didn't hear anything about Algore his coal investments or non-investments. I made that up.

Disclaimer: this is not an investment site. Do not make any investment decisions based on anything you read here or anything you think you might have read. For investment advice, contact George Soros or Algore. 

And then this: Valero Energy "wins" license to re-export Canadian oil. San Antonio Business Journal is reporting (I can't make this up either):

San Antonio-based Valero Energy Corp. has received a U.S. Commerce Department license to re-export Canadian crude, an option it could use if severe winter weather blocks rail shipments to its Quebec refinery, officials say.

The permit, granted last month, would allow Valero to ship light Canadian crude via rail to the U.S. Gulf Coast, where it could be loaded on a ship then carried to Quebec for processing, says Bill Day, a spokesman for the world’s largest independent refiner.

“(This license) gives us the ability, but I’m not going to say we’re going to do it on a daily basis,” Day says.

The re-export permit, which lasts for a year, is the first obtained by Valero, which aims to  wean its 265,000-barrel-per-day Quebec facility off overseas crude this year.

While U.S. law largely prohibits the export of U.S. crude, the government does grant exceptions for sales of U.S. crude to Canada and for the re-export of foreign crude.

Valero won’t use the license to ship heavy crude from Canada’s tar sands — the type that would be carried in the controversial Keystone XL pipeline — according to Day.

“We’re not looking to ship heavy crude,” he says.

Smart move. One doesn't want to get on the wrong side of the Obama administration. Seriously, the US refiners need as much heavy crude as they can get. They have a relative surplus of light oil.

I've often opined that crude oil export will not happen except on a case-by-case basis. I guess this is one of the rare case-by-case cases. Stick that in your pipe and smoke it.

Williston Wire: How's This For News -- The New Recreation Center Is The LARGEST Park District-Owned In-Door Recreation Center In The Country -- Is It Time To Start Thinking A Williston NFL Or NHL Team? Salvation Army Could Use Your Donations: Sleeping Bags And Blankets

Headlines only; no links. It is easy to subscribe to The Williston Wire.

Williston Parks & Recreation District, along with JLG Architects, Sink Combs Dethlefs, Governor Jack Dalrymple and 2,500 community members, cut the ribbon on the new 236,000 square foot Williston Area Recreation Center. Dubbed the Williston ARC, the facility adds much-needed services in an area which has more than doubled in size in the last three years due to oil production. It is the largest park district-owned indoor recreation center in the country.

Top story of the year? Olympic champion Katie Ledecky helped celebrate the grand opening of the 50-meter pool at the Williston Area Recreation Center recently in Williston.  Ledecky swam the first official lap in the pool in remembrance of her grandfather, the late E.J. "Bud" Hagan.  Ledecky also spent some time in and out of the pool with the Williston Sea Lions swimmers.  "Ive never swam with a gold medalist before. I want to go to the Olympics and get gold medals too," says fifth-grade swimmer Madison Townsend.  Many of the young swimmers see Ledecky as a role model, and look to her for inspiration.

More than 2,500 folks checked out the new Williston Area Recreation Center on Friday during the first two hours it was open, from families with small children to oilfield workers still in their coveralls.  The crowd that gathered on indoor tennis courts for an opening ceremony got louder and louder as speeches continued, reflecting the community's eagerness for more recreation opportunities.

Outlaws Bar & Grill opens in Williston.

BLM Land In North Dakota Center Of Bloomberg's Attention On Flaring

Bloomberg is reporting, from the reservation in North Dakota:

Drillers flared 340 million cubic feet, or 30 percent, of the 1 billion cubic feet of natural gas produced per day in January, about twice as much as the 184 million cubic feet burned per day two years ago, said Marcus Stewart, an analyst at Denver-based Bentek Energy. The lost revenue adds up to $1.4 million each day, he added.

Energy executives say economic realities force them to start producing oil from wells before infrastructure is in place to haul away less-valuable natural gas. Bakken oil fetched $98.14 on April 4, while natural gas for May delivery fell to $4.439 per million British thermal units on the New York Mercantile Exchange the same day.

“We absolutely don’t want to flare the gas, that’s lost revenue,” said Russell Rankin, a regional manager for Norway-based Statoil, at a well site near the confluence of the Yellowstone and Missouri rivers.

“But if we drill a $10 million well, we’ve got lots of investors and they can’t wait to get that revenue back,” said Rankin, as a gas flare rose over land where the Lewis and Clark Expedition forged a new path through the American West. 

This whole article is a blend of op-ed and news. Actually, no news. This is all well-known.

It is interesting to compare this article with a Bloomberg article on wind and nothing, not one thing, was said about slicing and dicing migratory birds, and bats. 

On another note, talk about a disconnect. I must be missing something. I just posted a link to a Bloomberg article saying wind no longer needs subsidies or certainly implied that ... now this article, also from Bloomberg, suggesting that wind can't compete with wind .... well, which is it? Bloomberg is reporting:

The $14 billion industry, the world’s second-largest buyer of wind turbines, is reeling from a double blow -- cheap natural gas unleashed by the hydraulic fracturing revolution and the death last year of federal subsidies that made wind the most competitive of all renewable energy sources in the U.S.

Without restoration of subsidies, worth $23 per megawatt hour to turbine owners, the industry may not recover, and the U.S. may lose ground in its race to reduce dependence on the fossil fuels driving global warming, say wind-power advocates.

They place the subsidy argument in the context of fairness, pointing out that wind’s chief fossil-fuel rival, the gas industry, is aided by the ability to form master limited partnerships that allow pipeline operators to avoid paying income tax. This helps drive down the cost of natural gas. 

But here, Bloomberg says wind is doing just fine. So, which is it? 

By the way, why don't wind farms form master limited partnerships? I don't think there's any law against anyone forming master limited partnerships but I don't know. If there is a law, Congress could change it. But the inconvenient little fact: wind lucrative to a few corporations needing tax losses to offset other profits, and/or to meet state mandates, but investors aren't making much money on wind, yet. At least that's my spin. Which may be wrong. Disclaimer: 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.

Seven (7) New Permits -- The Williston Basin, North Dakota, USA; Oasis With A Nice Well; HRC With A Huge Well; XTO WIth Two Nice Wells

Wind setting new records. Bloomberg is reporting:

Wind was responsible for 4.8 percent of America’s electricity used in January. That’s the highest January total ever, breaking the record from last January, which broke the record for the January before that, and so on.

America’s rising wind power feels unstoppable. That’s because in many areas of the country wind has reached an important tipping point: becoming cheaper than coal and natural gas. In fact, states getting the most electricity from wind include gas-rich Texas, Oklahoma and Colorado.

Onshore wind power has come of age, and not just in the U.S. This next chart shows the levelized cost of energy worldwide, using data from Bloomberg New Energy Finance (BNEF). Average onshore wind power now costs the same as gas worldwide, at about $84 per megawatt hour. That’s without subsidies.

In the U.S., competition between wind and gas is fierce. New techniques known as fracking (or hydraulic fracturing for the timid) have overhauled the U.S. energy economy and brought America some of the cheapest natural gas prices in the world. In order to compete, U.S. wind relied on a tax credit, which expired at the end of last year.

Even without the subsidy, wind prices are getting cheaper as the technology improves. The cost of wind energy has declined by 43 percent over the last four years. There’s a backlog of projects that already qualified for the tax credit that will ensure a steady pace of turbine growth for the next few years, according to BNEF wind analyst Amy Grace.

Wind competes with natural gas. Remember: the Bakken is an oily field. I guess that's why North Dakota was not included among the states with most slicers and dicers.

Active rigs in North Dakota:

	4/7/2014	04/07/2013	04/07/2012	04/07/2011	04/07/2010
Active Rigs	194	187	208	171	103

Seven (7) new permits  --

• Operators: Hess (4), Whiting (3)
  Fields: Cherry Creek (McKenzie), Big Stone (McKenzie), Pleasant Hill (McKenzie), Estes (McKenzie), Hay Creek (McKenzie)
• Comments:

Wells coming off the confidential list over the weekend, Monday were posted earlier; see sidebar at the right.

Six (6) producing wells completed:

• 26109, 1,399, Oasis, Montague 55-1 13-3 3B, Cow Creek, t2/14; cum --
• 23878, 570, CLR, Juneau 5-11H, Brooklyn, t3/14; cum --
• 23877, 802, CLR, Juneau 4-11H, Brooklyn t3/13; cum -- 
• 24256, 2,546, HRC, Fort Berthold 152-93-7D-6-1H, Four Bears, t2/14; cum --
• 25837, 1,286, XTO, Duke 34X-31E, Siverston, t3/14; cum --
• 25835, 2,595, XTO, Duke 34X-31F, Siverston, t3/14; cum -- 

Wells coming off the confidential list Tuesday:

• 23541, drl, Enerplus, Honor 150-94-06B-18H TF, Spotted Horn, no production data, 
• 25787, drl, Hess, EN-Cvancara A-155-93-3231H-5, Robinson Lake, no production data, 
• 26092, drl, BR, Big Bend 21-2TFH, Camel Butte, no production data,
• 26171, drl, Hess, SC-4WX-153-98-3130H-1, Banks, no production data,
• 26334, drl, Hess, GN-Frantzick-158-97-1003H-1, New Home, no production data,
• 26442, 665, Slawson, Bazooka 3-20H, Big Bend, t2/14; cum 24K 2/14;

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

Doomsday: California

The news continues to worsen for the Southland. Earlier it was reported that since 1990, the job growth in Los Angeles has been worse than in Detroit. Now this: Boeing will shut down the C-17 manufacturing in Long Beach three months early.

Boeing Co. announced plans to stop production of C-17 cargo jets at the company's sprawling Long Beach plant three months earlier than it previously anticipated.

The aerospace giant said Monday it will shutter the 1.1-million-square-foot facility in mid-2015 due to “current market trends and the timing of expected orders.”  The plane maker had initially said that production would come to an end in late 2015.

The company said it expects to record $50 million in accounting charges in the first quarter as a result of Monday's announcement.

Boeing said about 2,200 employees support the C-17 program in California. The company already began workforce reductions this year and plans to continue the cuts through closure.

"The Bakken" As Laboratory: Secondary Containment; Pad Design

One of the things I've enjoyed about the "Bakken laboratory" is watching the new technology, the new processes being developed.

I was just sent a note about a relatively new development in secondary containment in the Bakken. It looks quite interesting. I would think this would be a pretty neat solution to spring flooding issues.

I would also think that the less stuff that has to be buried the better. I don't know. But with the tanks sitting slightly above grade, the pipe could, I suppose, all be above ground making corrosion less of a problem, and inspection, maintenance, and replacement a whole lot easier. No back hoe required to ditch the pad; the tanks, also above grade, lessening issues with corrosion and making it easier to inspect and maintain.

Again, I may be misreading this but that's what it looks like to me. I could be wrong, but it looks like most of this could be set up on site quickly and with a minimum number of workers.

The website: www.sentinelcontainment.com.

BNSF Has Slowed Train Velocity By 16%; Slow On Ordering New Oil Tank Cars -- Both Smart Moves

If you were the owner of a railraod, would you order new oil tank cars now or wait until the new federal regulations come out?

Okay, if you were the owner of a railroad and were being accused of driving your trains "too slowly," would you just refer complaints to federal regulators who want you to go "slower"?

See story being reported at investorvillage:

BNSF Railway Co., the carrier owned by Warren Buffett’s Berkshire Hathaway Inc., will need the rest of 2014 to untangle train tie-ups in the corridor that serves North Dakota’s Bakken shale region.

A system-wide traffic jam, caused by surging grain and crude-oil volumes coupled with harsh weather, is being resolved more quickly on the southern lines linking Chicago and Los Angeles, Chief Executive Officer Carl Ice said yesterday in an interview at the railroad’s headquarters in Fort Worth, Texas. “Our southern region, we see that improving right now,” Ice said. “The central a little slower and the north taking through the year.”

That's the lead. Now, in the body:

Slower Trains

Train speeds for Union Pacific Corp., whose network is concentrated in the western U.S. like BNSF’s, fell 8.7 percent in the first four weeks of March from a year earlier, according to data compiled by Bloomberg. BNSF’s velocity dropped 16 percent in the same period.

And then deeper in the body:

Upgrades

Railroads are lobbying for upgrades that include a thicker steel hull, while the shippers and leasing companies that own the rolling stock have said modifying current tank cars to those specifications is prohibitively costly.

There are about 92,000 tank cars in service hauling oil and ethanol. Of those, only about 14,000 were made after the industry agreed to safety enhancements in 2011, according to the Washington-based Association of American Railroads trade group.

BNSF will be flexible while working with railcar makers on the design, Ice said. The railroad would like to see “an aggressive phase-out” of the older tank cars, he said. “The right thing to happen is what we’ve called the next-generation tank car, at least for our railroad,” Ice said.

It was nice to see "oil and ethanol" in the same sentence. Bakken crude oil cannot be any more dangerous than ethanol; what's good for the goose is good for the gander, they say.

And if the feds want the railroad companies to drive their locomotives more slowly, well, that can be arranged, also.

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

A Note to the Granddaughters

Talk about a wonderful day.

First, the NASCAR race was delayed until today while you are in school, so I can watch the race without interruption. Your grandmother is still out in California, so I have the race and the house and the junk food and the blog and everything else to myself. 

Then, tonight, the championship NCAA basketball game is on a channel we actually get, one of the few (CBS) and it comes on late enough that soccer and swimming will be over and, again, I will have an uninterrupted evening of another sports spectacle.

It can't get much better than this. I believe in miracles.

I Believe In Miracles, Hot Chocolate
It's hard to believe this was "top of the pops" once upon a time.

At about the halfway mark in the NASCAR race, Jeff Gordon is in lead, and about eighteen cars are a lap down. At least I think I heard them say that. If he stays true to form, he will finish 7th, and Danica Patrick will finish 18th. Kyle will win. [Later: I wasn't far off: Jeff came up short, #2; Logano won; Danica finished 27th, I think; Kyle almost won, coming in third.]

From InPlay -- TPLM Update -- For Investors Only; Note WTI Vs Realized Bakken; Analyst Raises Price Target On EOG ($240 Pre-Split/$120 Post-Split)

Disclaimer: 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.

Triangle Petroleum provides Q4 operations update and full fiscal year operating results:

Select Fourth Quarter and Full Fiscal Year 2014 Operating Results

• FY 2014 average daily production of 5,286 Boepd 
• Q4 2014 average daily production of 7,254 Boepd 
• January 31, 2014 exit rate production of 8,193 Boepd (21-day trailing average) 
• Net proved reserves increased to ~40,300 Mboe as of January 31, 2014 (~40% PDP) 
• Increased proved reserves SEC PV-10 to ~$678 mln 
• Ended the year with ~$82 mln of cash and ~$205 mln drawn on credit facilities (90% E&P Segment, 10% RockPile Energy Services) 

Preliminary Consolidated Fourth Quarter Results 

• WTI NYMEX ($/Bbl): $95.59
• Oil Differential ($/Bbl): ($15.98)
• Realized Oil Price ($/Bbl): $79.61
• Realized Oil Equivalent Price ($/Boe): $73.98
• RockPile Gross Profit (000's): $6,853

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

Stifel analysts: EOG Resources, which is reporting record oil and gas production and revolutionizing the U.S. energy position, is upped to $120 from $100.

From Motley Fool:

EOG Resources has bet its future on the Eagle Ford, which is looking like a smarter decision with each passing quarter considering the massive potential of the region. To put it into some perspective, EOG's current reserve potential is almost four times what the company initially thought when it discovered the play just four years ago. And, EOG is essentially doubling down on the Eagle Ford this year. It's planning to build as many as 520 net wells there during 2014. 

How does that compare with EOG in the Bakken. Through the end of the first calendar quarter, EOG had 34 new permits in the Bakken which puts it on track to add a paltry 136 wells this year. EOG's Eagle Ford wells are probably 10 - 15% better (maybe more) than Bakken wells in terms of production.

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

ObamaCare Results In Loss of Insurance For 1,800 Kids in New Jersey

Breitbart is reporting:

Obamacare's new mandated requirements killed New Jersey's low-cost children's insurance coverage plan, FamilyCare Advantage.

The plan, offered by Horizon Blue Cross Blue Shield of New Jersey, was designed for children whose parents make too much money to qualify for Medicaid and offered medical, dental, and vision coverage for just $144 a month.

The program, which was the first of its kind in the nation, was implemented six years ago and considered a model for others states seeking economical ways to provide quality coverage for kids from working class families.

Yet, since FamilyCare Advantage lacked things like mental health services, Obamacare deemed the children's 1,800 plans illegal and the program shuttered last week. 

"This is enormously disappointing, said NJ state Sen. Joseph Vitale (D) who co-sponsored the bill that created the program. "It was $5 for doctor visits, $1 for pharmacy and no deductible or cost sharing."

Many, many story lines. The biggest story line, something I've opined about for years: the biggest expense in medical care is not AIDS or the "big C" but mental health. Besides not offering mental health care coverage for children, it probably also did not cover costs associated with a pregnancy for the boys.  The Democratic state senator will rail against the travesty but nothing will change. It's water under the bridge.

ETP -- Bakken To Illinois -- Dakota Access Pipeline -- The Bakken

Updates

March 24, 2015: ETP, Bakken-to-Illinois, Dakota Access Pipeline, miles of pipeline being brought in, stored near Aberdeen, SD; South Dakota state has until December 15, 2015, to make decision.

August 30, 2014: Iowa activists trying to stop the ETP pipeline. 
 

Original Post

Platts is reporting:

Just two months after Koch Pipeline scrapped construction plans for a 250,000 b/d North Dakota-to-Illinois crude pipeline without saying why, some US crude market participants may have deja vu as they review the terms of an open season for a nearly identical pipeline project.

They also might wonder how competitor Energy Transfer Partners expects to get backing for its new crude pipeline that would run a nearly identical route as Koch’s abandoned project. The project is being proposed by ETP subsidiary Dakota Access.

When asked about the project’s validity by Platts, ETP spokeswoman Vicki Granado said:  ”The answers to your questions will be determined by the interest we receive during the open season. I have no further details at this time.”

Koch said last year in a statement that it “intended to explore” a connection for Dakota Express at Patoka, Illinois, to Energy Transfer Partners’ proposed Eastern Gulf Crude Access pipeline (EGCAP) project, which is expected to deliver Bakken crude to Nederland, Texas, from Patoka.

Bakken crude via a proposed Koch's pipeline to Patoka, IL, to tie up with competitor ETP's pipeline to take Bakken crude to Nederland, TX. 

Feedback From A Reader On Recent Posts

I can't recall if I replied to the reader who sent me a very, very long note regarding a recent post. He brought up a lot of great points which I will summarize here:

Bakken completions: You have fairly recently said Hess has realized significant improvement in their recoveries over the last 8 - 10 months, or whatever time period, and I believe you have indicated Continental needs to improve their completions.  At Continental's Q3 2013 earnings call, the one where Harold Hamm laid out his "ears pinned back" program, I am sure you know they acknowledged this need and indicated they have already begun trying new approaches, and will employ and measure varying completion techniques in 20% of their 2014 wells.

Global competition for resources to develop oil fields: a recent WSJ article which noted the concerns big oil companies expressed at an IHS conference regarding the high costs of their global projects -- $5 billion plus. Germaine to your piece was a comment that these 35 or so large companies are "competing for the same service contractors, engineers and equipment...."

Cost inflation: On another note the WSJ article indicated one place where cost inflation wasn't at the forefront of discussions was the U.S. shale energy development.  In line with the conclusion of one of your recent posts, an adviser to Halliburton's CEO said "the industry has successfully driven down costs in the U.S.  Now it needs to 'make better wells' that produce more oil and gas."

Better completions: The greatest contributor to future Bakken production is improved recovery, and I believe it will happen.  My understanding is that service companies lead the way with their technology R&D in this area, and that among them Schlumberger makes the largest R&D commitment.  This will be interesting to watch.

Triple-A Supply Chains:

Of course, other aspects E&P's should bear in mind in their quest for production growth are Hau Lee's observations in his "The Triple-A Supply Chain".  In studies from the inside of more than 60 leading companies he observes, "All those companies and initiatives persistently aimed at greater speed and cost-effectiveness -- the popular grails of supply chain management."

He states, "... companies whose supply chains became more efficient and cost-effective didn't gain a sustainable advantage over their rivals.  In fact, the performance of those supply chains steadily deteriorated."

Lee says, "Only supply chains that are agile, adaptable, and aligned provide companies with sustainable competitive advantage....  Most companies continue to focus on the speed and costs of their supply chains without realizing that they pay a big price for disregarding agility, adaptability and alignment."

Finally: The adviser to Halliburton's CEO is correct; efficiency and cost-effectiveness alone will not drive greater Bakken production -- in this case improved recovery is essential.

That was from the reader. I enjoy the feedback. (The fact that there were no spelling errors or grammatical errors was remarkable for such a long, long reply. I can only assume the reader was a) not using an iPhone to write the comments; and, b) graduated from the North Dakota or Iowa public school system. And had a very, very strict 5th grade teacher.) I apologize if I did not reply with a "thank you" to the e-mail. I believe this note maintain anonymity but if the reader wants it removed, I will remove it. [A very smart reader noted I was wrong -- there may be one spelling error; "germaine" is considered obsolete. "Germane" is the appropriate word.]

Monday, Monday -- April 7, 2014 -- Last Day That Starbucks Coffee Is On Sale (This Cycle)

Tea leaves suggest geo-politics will be big story this week: from China to the Crimean.

Active rigs:

	4/7/2014	04/07/2013	04/07/2012	04/07/2011	04/07/2010
Active Rigs	192	187	208	171	103

RBN Energy: the four barriers to ethane export.

• Terminal infrastructure: There is little or no trading of waterborne ethane today
• Shipping: For the same reason there are no ethane unloading docks today, there are no ethane ships.
• Pricing:
• Petrochemical demand:

The Wall Street Journal

Top story: Hillary's phantom campaign squeezes other candidates; by the way, all photos of Hillary suggest a "Thatcher" look

Phony calls from ObamaPhones plaguing 911 centers

Some dems fight Obama over Medicare: worried about higher premiums for seniors

Investors clamoring for dividend-paying companies

News From Readers

Cove Point, MD, to become first operational natural gas export facility on east coast; Chesapeake; 2015. Huge story, reported in BuffaloNews.  

Regarding the new transloading facility east of east Fairview (on the ND side of the state line):

This property starts north of Hwy 200 just out of Fairview, MT and runs north for approximately  1 3/4 miles with acreage on east and west of existing railroad track. Google Northstar Loading. They have a site map you can view.

15 billion bbls of recoverable oil in the Monterey Shale -- LA Times. Might as well be on the moon. Three obstacles:

• activist environmentalists against Big Oil
• fear of earthquakes by "everyone"
• tectonics resulting in very, very confusing geology; ground constantly shifts

I can never get this site to load, but there are "two burgeoning markets that stress rail": wheat and ethanol competing for CBR space.

I think this is a much bigger story than many folks realize. AirProducts completes the $1 billion hydrogen pipeline running from north Louisiana to south Louisiana. I remember talking about the hydrogen shortage just two years ago. Hydrogen, in addition to all its other uses, is used for cooling high-tech equipment.

This is another huge story not on the radar scope of many folks: Texas will benefit as Pemex monopoly comes to an end. The San Antonio Express-News is reporting:

As Mexico moves forward to allow foreign investment in its energy industry — including shale development — the change will be a great economic benefit to Texas, Railroad Commissioner David Porter said Tuesday.

The state's booming Eagle Ford Shale formation doesn't end at the border; it continues into Mexico. As it and other shale plays in Mexico are tapped, “there is potential for U.S. companies and technologies to go there to work,” said Porter, who spoke at a meeting of the Eagle Ford Task Force in San Antonio.

The Los Angeles Times

Security holes in power grid have federal officials scrambling. So the LA Times will do its part in shouting the alarm to terrorists: you better move fast. The feds are tightening security.

Perhaps the top story of the day: "Captain America" sequel shatters records with $96.2-million debut. BloomsbergBusinessweek has an excellent cover story / five-page story on the man who saved Marvel Comics. This story alone might entice me to renew my subscription to BloomsbergBusinessweek; I wish it wasn't filled with so much fluff. Two regular columns that irritate the heck out of me: "How I became a billionaire"; and, "How I dress for work." Who cares?

Another Obama re-election ad looking like a news story: number of Americans without health insurance reaches new low.

Mickey Rooney dies at age 93; he ruined "Breakfast at Tiffaney's," though George Peppard was about as cold a fish as one sees in a chick flick. Audrey beautiful to look at, but not much chemistry. "Casablanca" remains in a league of its own.

George Strait takes entertainer trophy at 49th ACM Awards. By the way, the resurgence of country music was a front page story in the New York Times yesterday.

I am not sure why the LA Times continues to print stories on the Los Angeles Lakers.

I love the spin on this caption of a teaser-photo: "The slain journalist who did her best work in George W. Bush's war." Haven't heard a thing about the four or five wars that Obama is waging / has waged. Cognitive dissonance. Nobel Peace Prize. Five wars in six years.

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A Note to the Granddaughters

The NASCAR race -- just a few miles to the west of us -- was rained out yesterday -- Texas Speedway.

Today, a beautiful day but light rain predicted this afternoon.

I'm still sore from all the physical activities we did this past weekend.

The cakes we baked last evening are incredible.  Arianna pretty much did all the mixing, though Olivia used the electric mixer to complete the porject. They each frosted half the cake, and then we brought it over to their house. When I got back home, I made another cake to use up the other half of the frosting. The granddaughters came back at 8:00 p.m. to watch Cosmos. It was the second best in the series so far, of the four shown. The topic was "light." Much yet needs to be discussed/shown on Cosmos regarding "light." I understand another 1% about light bringing my understanding of light up to about 4% of what probably needs to be understood. I could be wrong, but I think the narrator said physicists understood what moved an electron from an inner shell to an outer shelling (heat) giving off a photon (light) but said that physicists did not understand what "caused" the electron to fall back from the outer shell to an inner shell. I could be wrong, but I think that's what he said. I find that interesting if that is true. I find it interesting that light bends when it hits a prism, and thus a rainbow. I assume neutrinos go straight through. If light did not bend going through a prism, one wonders how much longer it would have taken scientists to figure out the science of light. I told the girls that Newton was very, very interested in optics, but he got it wrong. The narrator on Cosmos didn't actually get optics "wrong." He merely said that Newton failed to make the discovery that was within his grasp. He was probably interrupted by a call for dinner just as he was about to ....

The Dickinson Press

I normally don't link these stories; there are just way too many of them. Regular readers can find "faces of the Bakken" at The Dickinson Press on a regular basis.  But just to remind folks:

POWERS LAKE, N.D. – When Carolynn Robinson and her husband moved from Washington state to North Dakota to work in the oilfields, they thought it would just be a summer gig.

But the move worked out so well, they decided to stay.

“We’re getting more and more attached to North Dakota,” said Robinson, who moved to the state about two years ago.

Lack of work in their home state prompted them to move to North Dakota.

Robinson’s husband, Travis, came to North Dakota first, and now works as a pipeline welder.

For the granddaughters:

The International Space Station (ISS) returns this week to highlight the evening sky. Outside of Venus and the moon, the ISS is the brightest, star-like object in the nighttime sky. It orbits from west to east, the same direction the Earth rotates, and crosses the sky in about five minutes. At an altitude of about 250 miles, the station orbits above most of the auroras we see which is why astronauts get such cool photos of the northern and southern lights from orbit.

The new evening observing season begins for many locations across the northern hemisphere with passes happening once or twice a night. To watch the space station, og out a couple minutes before it's expected to appear and look for a pale yellow "star" bright than any other moving form west to east across the sky.

The best way to see these events: go on a cross-country drive, and drive all night. I have had some spectacular views doing just that over the years.

Vern Whitten Photography Has New Website Format

The farmland photographs are simply spectacular.