Just What Does Happen When There's An Underground Oil Spill: For The Archives

For the archives. This is a very, very interesting story about the evolution of an underground oil spill. The Star Tribune is reporting:

Pollution control experts once doubted that subsurface microbes could break down oil because of the lack of oxygen. But scientists working at the Bemidji site published scientific studies in the 1990s that showed otherwise.

“Those results got nationwide attention,” said Barbara Bekins, a USGS research hydrologist based in Menlo Park, Calif., who coordinates research at the Bemidji site.

As a result, “natural attenuation” was recognized as a cost-effective way to remove underground pollution, especially from urban gas station tanks where digging up blocks of property isn’t an option.

Scientists on the Bemidji Crude Oil Research Project also have made discoveries about the spread of pollution “plumes” underground, pioneered ways to measure natural breakdown of oil and learned about how petroleum-eating bacteria work.

Research at the site has shown that bugs rapidly eat toxic, water-soluble compounds such as toluene and benzene. The spread of such compounds in the site’s water table has halted about 500 feet of the spill. “Toluene is 100 percent gone,” Bekins added.

Much of the remaining oil floats atop the water table, about 2-feet thick. But it hasn’t moved far, suggesting that even a major oil spill doesn’t necessarily pollute an entire aquifer. That’s been a worry about the massive Ogallala aquifer in Nebraska, where antipipeline activists oppose building TransCanada’s proposed Keystone XL crude oil pipeline.

“The position that … one pipeline release to a sandy aquifer is going to destroy the aquifer forever, the science doesn’t back that up,” said Paul Meneghini, a senior environmental manager for Enbridge.

This is a very, very long story. Very interesting.  Quite surprising: in the StarTribune.

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The Trainwreck

Also for the archives.

The New York Times is reporting that hundreds of thousands of folks are going to get a chance to explain to federal officials why some data just doesn't seem to mesh. 

The Obama administration is contacting hundreds of thousands of people with subsidized health insurance to resolve questions about their eligibility, as consumer advocates express concern that many will be required to repay some or all of the subsidies.

Of the eight million people who signed up for private health plans through insurance exchanges under the new health care law, two million reported personal information that differed from data in government records, according to federal officials and Serco, the company hired to resolve such inconsistencies.

Interesting.

Wells Coming Off The Confidential List This Weekend, Monday

Futures fluctuating 

• Dow is down slightly
• Brent is flat
• WTI oil is up 50 cents, solidly above $107/bbl
• The Brent-WTI spread is almost exactly $5.00

Monday, June 16, 2014

• 25109, drl, CLR, Bonney 4-3H, Jim Creek, no production data,
• 25150, 759, CLR, Jerol 2-27H, Lindahl, producing, t4/14; cum 8K 4/14;
• 26311, 21, Whiting, BSMU 1910,  Big Stick, a Madison well, t3/14; cum 1K 4/14;
• 26842, drl, Hess, EN-Leo-154-94-2324H-3, Alkali creek, no production data,

Sunday, June 15, 2014

• 25189, 1,246, CLR, Patterson Federal 2-13H, Camp, t5/14; cum 2K 4/14;
• 25553, drl, Zavanna, Bear Cat 33-28 2H, Williston, no production data,
• 26156, drl, Statoil, Johnson 7-6 5TFH, Banks, no production data,
• 26806, 2,574, MRO, Tollefson 41-4H, Reunion Bay, t5/14; cum --
• 27025, drl, Hess, HA-Nelson A-2560-152-95-3427-3328H-1, Hawkeye, no production data, 

Saturday, June 14, 2014

• 24755, drl, Statoil, Melissa 31-30 3TFH, East Fork, no production data, 
• 26155, drl, Statoil, Johnston 7-6 6H, Banks, no production data,

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NBA Finals: San Antonio Spurs Rout

The San Antonio Spurs win the 2014 NBA Championship, taking 4 of 5 games. The Spurs continued the longest active playoff streak in the NBA at 17 straight appearances. The scores of the five games:

• Game 5: 104 - 87
• Game 4: 107 - 86 (rout, schooled -- words used by sports press, not me)
• Game 3: 111-92 (at Miami)
• Game 2: 96-98 (the one loss by Spurs, at San Antonio)
• Game 1: 110 - 95

A week or so ago my wife and I were disheartened to see California Chrome lose at Belmont, and thus not become a Triple Crown winner. Immediately after the race, both my wife and I heard the comments made by California Chrome's owner and there was some merit in his remarks. However, once our emotions settled down a bit we both agreed that a Triple Crown winner should be so impressive in all three races there would be no question about being named the Triple Crown winner. Maybe horse-racing is different, and maybe it isn't fair for the winner of the first two races to have to race against horses who had not raced in either of the earlier races. But I don't know: I think a Triple Crown winner needs to win each race convincingly despite the "fairness" issue. Which brings me to the Spurs. Having routed the Miami Heat in four of five games, and barely losing the second, there should be no question who the NBA champions are this year. What an incredible series. Who would have thought? 

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The Trainwreck

SeaCoast online is reporting: cities brace for impact of Obamacare.

PORTSMOUTH, New Hampshire — Officials from Portsmouth to Manchester are warning taxpayers and municipal workers alike about the potential profound impact of the Affordable Care Act's so-called Cadillac tax.

Portsmouth City Manager John Bohenko said this week that as the city negotiates with 13 of its 15 unions on new employee contracts, the impact of the Cadillac tax will have to be addressed. 

One of the provisions of the Affordable Care Act, which is more commonly known as "Obamacare," is that starting in 2018 any health care plans that cost more than $10,200 for an individual or $27,500 for a family will be subject to the Cadillac tax.

Those plans will be taxed at a rate of 40 percent for the amount of the plans that are in excess of the spending limits.

The tax would be paid by the health insurance companies, but Bohenko and others acknowledged the insurers would just pass those costs on to consumers.

The good news: this doesn't kick in until 2018. Not to worry.

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UC Irvine? Really?
[Update: see first comment below regarding UC Irvine. Perhaps I stand corrected. The political explanation makes sense. In fact, now it makes a lot of sense.]

I notice that Obama got a standing ovation at UC Irvine. It did not dawn on me until now -- I'm sure UC Irvine was picked because it was close to where he was vacationing. But in the big, big scheme of things, UC Irvine is about as inconsequential as any venue in the country.

This was probably scheduled months ago. It is common practice for aides to schedule events where the president will be adulated, to "buck him up" when times are tough. I would not be a bit surprised if he was psychologically in a tough spot six months ago and his aides needed a place to get his energy back up and they picked a place that would be overwhelmingly energetic for him.

When I look at the headline, "standing ovation at UC Irvine," I assume those who know the UC system know that's about as low as one can go. (Don't take that out of context; this is not a "hit" on UC Irvine; I'm looking at it as a political venue.) (The bigger story would have been if he had not gotten a standing ovation at UC Irvine.)

A much more impressive venue would have been Berkeley, UCLA, Stanford, but Californians know UC Irvine was a joke. In the big scheme of things, the Indian Reservation was important, perhaps to a few folks in ND/SD, but that, too, suggests a real, real "comedown" for Obama. No matter how you spin it, UC Irvine and SRIR are a long way from London, Berlin, Paris, Moscow, for a "world leader."

I think Peggy Noonan missed that story, but it would be amazing if she picked up on it and wrote about it. I don't know; maybe I'm making more out of it than I should, but one would think that the Barack Obama of 2008 or 2010 or 2012 would find bigger venues than SRIR and UC Irvine.

Until his visit, "no one" had heard of SRIR, and outside of California, I wonder how many have heard of Irvine. I honestly don't know how to get there, and I've spent much of my life out there. I certainly don't know where the campus is.

I assume we will see better venues for him going forward. He probably had some words with his aides after those two venues, suggesting they have to do better in the future.

UC Irvine? Really?

Williams Cos To Buy Access Midstream Partners LP; To Increase Dividend By 30% Later This Year

Updates

June 11, 2015: Hess and Global Infrastructure Partners to form joint venture, also. See their website here.

June 20, 2014: The Market Realist explains the deal. 
 

Original Post

I thought I read this earlier and even thought I might had posted but I can't it, so I must be dreaming. A reader sent me this, thank you. Bloomberg is reporting:

Williams the fourth-largest U.S. pipeline company, agreed to buy control of Access Midstream Partners LP for about $6 billion in a step toward becoming a pure holding company.

The purchase for $5.995 billion cash from Global Infrastructure Partners II will increase William’s ownership to 100 percent of the general partnership and 50 percent of the limited partnership, Williams said in a statement today.

Following that, Williams will propose that it and Access merge into a master limited partnership named Williams Partners LP, which would have 2015 adjusted earnings before interest, taxes, depreciation and amortization of about $5 billion.

Access, with a market capitalization of about $13.2 billion, provides oil and natural gas gathering services to Chesapeake Energy Corp., Anadarko Petroleum Corp. and other major exploration companies, according to its 2013 annual report. Its shares are up about 16 percent this year. 

But this is what caught my attention:

Williams said it will increase its third-quarter dividend by 32 percent to 56 cents a share once the transaction closes.

After seeing that I sent this note to the reader who sent me the story:

In my meandering post on DNR, I was trying to point out that "dividends are the new game in town."

A few months ago, what was probably obvious to everyone else, was starting to become clear to me. It was an "aha" moment.

Seniors on a fixed income, experienced investors, older investors, all of us are getting frustrated that savings accounts, money market funds, etc., are not providing any income. Investors interested in income are looking elsewhere.

Because of renewable energy and the war-on-coal some analysts warn folks to stay from historic income-oriented stocks, the utilities.

In response, folks are turning to other sectors for income. And in turn, the capital-intensive companies are issuing bonds to fill the gap. Money is cheap, so the issuers do well, and investors are happy.

But these companies are now competing for investors, and that's why I think we are seeing (some) companies initiate and increase dividends.

I had forgotten or was unaware that WMB was increasing its dividend by 32% -- that's not trivial. Supports the point I was going to make when I started posting about DNR -- a company that has never paid a dividend, not initiates a dividend and will double it the following year.

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. 

Somewhat related: it appears that, for investors (not traders), this might be the decade for large caps, as opposed to small- or mid-caps. The large caps have huge amounts cash (Apple, one case in point) and will be returning cash to their investors. At least that's that talk among some.

It's going to be an interesting decade.  

[I'm not dreaming. I did see this story on Friday but did not post it. At that time Bloomberg said the deal was for $3 billion, not $6 billion. Maybe I'm misreading the two stories. Whatever.]

WMB currently pays $1.70 (3.60%).

$1.70 * 1.32 = $2.24/share (annual), or at current share price, $2.24 / $47 = 4.8%.

Happy Father's Day To All

Updates

June 16, 2014: two data points to connect. The first data point was supplied by the New York Times in the article linked down below which began:

It took only two days, though, for the fighters of the Islamic State in Iraq and Syria to issue edicts laying out the harsh terms of Islamic law under which they would govern, and singling out some police officers and government workers for summary execution.

With just a few thousand fighters, the group’s lightning sweep into Mosul and farther south appeared to catch many Iraqi and American officials by surprise. But the gains were actually the realization of a yearslong strategy of state-building that the group itself promoted publicly.

The second data point: Hillary got "out" just in time.

It doesn't take a political scientist to connect those two dots. If the planning for "taking down" the legitimate democratically-elected government of Baghdad was in the works for years, and the Obama administration was doing nothing about it, surely everyone in the Mideast knew it, and certainly Bremer knew it, and certainly Hillary knew it. She got out just in time.
 

Original Post

I guess we will have to wait for the June Director's Cut to come out tomorrow.

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Investment Potential In The Bakken

I did not know what to "headline" this link, but this is a very, very interesting story. As usual, because of the way such articles are written, it's a bit convoluted, but it's an important story for anyone interested in the Bakken. A big "thanks" to Steve for sending it my way. Regardless of what side of the issue you might be on with regard to CBR and its risks, this story has huge implications. MarketWired is reporting that:

Quantum intends to strip Bakken crude down to a Reid vapor pressure of 6 psi or lower and sell the separated gas liquids. The Tempe, AZ-based holding company also hopes to set up five micro-refineries modeled after a new joint project run by MDU Resources Group Inc. and Calumet Specialty Products Partners. Once completed, that diesel facility will mark the first new refinery built in the United States in nearly 40 years.

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LNG Fleets: The Tipping Point

Mark your calendar: June 13, 2014, may have just been the date that LNG reached the "tipping point" in the good ol' USA.

The Houston Business Journal is reporting that:

A more environmentally friendly "sea of brown" UPS vehicles are coming to Houston as the delivery giant introduces 1,000 liquefied natural gas trucks into its fleet — the largest fleet of LNG trucks in the world.

Nearly 60 LNG tractor-trailer trucks, or 18-wheelers, are coming Houston and 142 of them will be in Texas. About 100 other smaller LNG delivery vehicles also will be brought into Texas.

The new natural gas vehicles will replace diesel engine trucks and will displace more than 24 million gallons of diesel fuel annually. 

Great things may be happening in Russia, China, India, Japan, Germany with regard to renewable energy, but the US free-market capitalistic economy keeps moving along, making greater strides in energy, and in the process, widening the delta between the US and the rest of the world when it comes to energy. Memo to self: insert a copy of Mr Obama's speech, "You Didn't Build That" at some later date.

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A Note to the Granddaughters

I am home alone for a couple of weeks. My wife is out in California. I slept in late, but will join my daughter/son-in-law and granddaughters for a later lunch at a Mexican restaurant. Perhaps more on that later. It's my favorite Mexican restaurant at the moment.

I rode my bike to the nearest Starbucks this morning, where I am now. It is in a neighborhood grocery store (not Target) and generally not busy at all by this time in the morning. I was the only one there.

Nothing out of the ordinary, I simply walked up to the counter and told the barista, "a tall dark. And no room for cream."

His reply: "Was that 'leave room for cream'?" While he was punching in his code to open the electronic cash register.

I replied: "No, no room for cream. Thank you."

Then, the response that really put things into perspective: "Could I have your order again?"

"Yes, a tall dark."

It's gonna be a long day.

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I got home safely from Barnes and Noble last night with my new book purchases. I am thrilled with the purchases. (If anyone is really curious, and I doubt anyone is, I spoke of these books in an earlier post.)

When I got home I sat down to enjoy a late night watching some Blu-Ray DVDs. I started with Miami Vice, second season, last episode. Miami Vice was not particularly consistent; some good episodes; some not so good. Fortunately the visuals and the music provided some redeeming quality for even the worse episodes. This particular episode was quite good.

Then, unto Alfred Hitchcock's Notorious with Ingrid Bergman and Cary Grant. It's one of my favorites, and I try to watch it two or three times a year. Of course, my favorite remains Casablanca, and more often that not, I watch it while listening to the commentary by Roger Ebert. One can get a feeling for his commentary at his blog. Notorious also comes with two commentaries but last night I just watched the movie "in peace." Ms Bergman preferred to be photographed/filmed in left three-quarter profile. That preference was obvious in both Casablanca and Notorious. I never really "understood" the art of acting until I saw David Lynch's Mulholland Drive. Ever since that movie, my regard for successful actors has increased immensely. I just wish most of them would stay out of politics unless they actually ran for office. I wish more would run for office.

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Summer Reading

Speaking of books, this probably won't make our older granddaughter any happier today: I just received a note from Amazon that they have shipped the book I ordered, Kumon: Pre-Algebra.

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Dereliction of Duty

I see the New York Times got the headline wrong. "Dereliction of duty" would have been more accurate, but then again, this is the New York Times. It's hard to believe that the New York Times could put this story together in less than 48 hours; this suggests to me a lot of folks knew the background and were just waiting for "it" to happen.  

It is a well-known fact that the large news organizations have obituaries written well in advance, so they can get them published within hours of a celebrity death, only having to fill in the last few details. If one looks at the New York Times story from that aspect, it is obvious this is the obituary of a democratically-elected government in a Muslim country. The obituary was written well before it was published today, just waiting for the final details to be filled in.

The Republic of Iraq

May 20, 2006 - June 12, 2014

But then again, this government lasted longer than most Italian governments.