Thursday, June 19, 2014

New Hampshire Utility Offers To Cut Summer Electric Rates

I hesitate to post this. I must be mis-reading something. The local New Hampshire utility wants to cut electricity rates this summer for their customers. It sounds like they want to cut summer rates to sort of "make up" for the high winter rates coming this winter and for the next several years.

You have to love your utility company that asks for a rate decrease in the summer to help offset the pain you will feel this winter.

Anyway, look at the story, and decide for yourself if I am misreading this. Fosters Daily Democrat is reporting:
Until New Hampshire’s infrastructure catches up with the state’s energy demand, the high and unstable prices of electricity during winter months are expected to continue over the next several years, said William Quinlan, the new president and CEO of Public Service of New Hampshire.

This past winter, PSNH customers not only saw “extraordinarily high prices,” but also rates that changed dramatically from month to month, Quinlan said during an editorial board meeting with Foster’s on Wednesday.

“I think it’s an early warning of what the next few winters are going to look like,” he said. “This winter was a wake up call for all of us.”

On Monday, though, PSNH announced it is expecting lower overall rates for customers starting July 1. Despite rate hikes that have previously been predicted, PSNH has asked the state Public Utilities Commission to make a series of adjustments, and if all changes are made, average monthly bills for residents would be reduced by about three-tenths of a percent, according to a statement by PSNH. 
Doesn't that sound like the utility wants to cut rates now to ease the pain you're gonna feel this winter?

Okay, look at the savings they plan to offer: "... if all changes are made, average monthly bills for residents would be reduced by about three-tenths of a percent, according to a statement by PSNH."

That's if all changes are made; if not, the savings won't be quite as significant.

If one has a $100 monthly summer electric bill, the savings would be: $100 x 0.003 = 0.3 cents (over three months, one would save a penny for every $300 in utility charges).

If one has a $250 monthly summer air conditioning bill, the savings would be $250 x 0.003 = 75 cents. Over three months, the savings would be about $2.25. Again, that's if all the changes are "accepted" by the Public Utilities Commission.

Of course the big story is the "several years" of high electric rates during the winter months due to poor planning on the part of public officials.

The whole story is ... well, let's just stay a bit "bizarre." Here's the reality:
New Hampshire’s worrisome reliance on natural gas, said Quinlan, will likely continue to grow, as oil, nuclear, and coal plants have been retiring throughout New England.

He said the Northern Pass project, which initially was proposed from an environmental standpoint as a way to reduce carbon emissions, is increasingly being seen as a critical supply to replace plants that are retiring.

But the energy supply that would come with Northern Pass would only make up for a third of the supply lost due to the plants that are retiring in the next three years, so PSNH will be looking at additional solutions, including wind and solar power and improving gas pipe infrastructure. [These folks are in real trouble.]

Although wind and solar power can be part of the solution, by themselves will not be enough to prevent an energy crisis in future years, because those systems cannot provide power at all hours of the day. [Oh, I don't know. I understand why solar might not be able to provide power "at all hours of the day" but certainly the wind blows 24 hours /day. LOL. I can't make this stuff up.]
A Note to the Granddaughters

Sweet Caroline, Neil Diamond
This was following the Boston Marathon bombing.

I have to admit I have extremely fond memories of New England. I first visited Boston in the summer of 1973. Years later our second granddaughter was born in Portsmouth, New Hampshire.

Then several years later we spent much of the next four years in Boston, on and off taking care of our two granddaughters through their first years of elementary school in Belmont, a suburb of Boston. Fenway Park really was that green. I saw my first "live" professional baseball game in Boston in 1973, and saw Fenway Park again when we visited Belmont.

I listened to Neil Diamond throughout my high school years in Williston, and I would have sworn that I listened to "Sweet Caroline" numerous times driving back and forth between Williston and Blacktail Dam north of the city during the summer of 1969. The song was released in May, 1969, so it's possible. My journal records that the group I most associate with the summer of 1969, however, is Creedence Clearwater Revival. And so it goes.

I don't feel a day older.

Lookin' Out My Back Door, Creedence Clearwater Revival

Seventeen (17) New Permits -- The Williston Basin, North Dakota

Wells coming off the confidential list Friday:
  • 25723, 693, Oasis, Rivera 5892 21-30T, Enget Lake, t2/14; cum 40K 4/14;
  • 25739, 206, Oasis, Jolly 6093 12-26T, Gros Ventre, t12/13; cum 13K 4/14;
  • 25988, drl, HRC, Fort Berthold 148-94-20C-21-5H, Eagle Nest, no production data,
  • 26035, 75, Corinthian, Corinthian Skarphol 8-33 2-H, North Souris, a Spearfish well, t11/13; cum 12K 4/14;
  • 26058, 1,449, Oasis, Montague 5601 42-34 4T, Cow Creek, t2/14; cum 15K 4/14;
  • 26110, 724, Oasis, Montague 55-1 13-3 2T, Cow Creek, upper Three Forks well 36 stages; 3.2 million lbs sand (some resin coated), t2/14; cum 5K 4/14;
  • 26158, drl, Statoil, Johnson 7-6 3TFH, Banks, no production data,
  • 26480, drl, CLR, Brogger 5-4H1, Crazy Man Creek, no production data,
  • 27023, drl, Hess, HA-Nelson A-152-95-3427H-4, Hawkeye, no production data,
  • 27073, drl, BR, Denali 11-4TFH, Johnson Corner, no production data,
Active rigs:

Active Rigs189186213173129

Seventeen (17) new permits --
  • Operators: CLR (6), EOG (3), Legacy (2), Whiting (3), WPX, Slawson, Petro-Hunt
  • Fields: Northwest McGregor (Williams), Parshall (Mountrail), Red Rock (Bottineau), Bell (Stark), Van Hook (Mountrail), Big Bend (Mountrail), East Tioga (Mountrail)
  • Comments:
Wells coming off the confidential list were posted earlier; see sidebar at the right.

Another Inconvenient Truth: ISIS Captures Saddam Hussein's Chemical Weapons Factories


Later, 5:39 p.m. CDT: remember how the "Whitewater" paperwork mysteriously showed up in Hillary's bedroom or Bill's study after all those years when it seemed to have been lost. Hold that thought.

It turns out the mainstream media will post this story tomorrow explaining the chemical weapons that ISIS found which we all thought the US Army had not been able to find. Here's the story I'm getting from very unreliable sources. They requested anonymity because they were not authorized to speak publicly on this.

This is the story: the US Army did indeed find Saddam Hussein's chemical weapons. Apparently there was much more than even Mr Cheney anticipated, but that all had to remain classified for obvious reasons. Before the US Army could destroy the chemical weapons, the army had to file an environmental impact statement. That statement had been reviewed, vetted, notated, triplicated, and signed by the Acting Secretary of State, and then hand-carried to the Oval Office. The material was placed in a manila ("holey-Joe") and then given to a White House aide. The manila envelope was labeled: Environmental Impact Study -- Saddam Hussein Inventory of Toxins. That was too long for the note so the aide abbreviated the name of that study on the outside of the manila folder.

Unfortunately, the president had stepped out (golfing?) and an aide placed the EIS-SHIT folder on the president's desk where he couldn't possibly miss it. Unfortunately, another aide, possibly Joe Biden himself, dropped off the EIS for the Keystone XL and placed it directly on top of the manila folder labeled EIS-SHIT.

It turns out that the EIS-SHIT file has been sitting under the Keystone XL file all this time -- for the past several years.

The story is that because of the acronym, the president never thought to get to it. The name of the file is Environmental Impact Study -- Pipeline InSide Stuff -- which Mr Biden or the aide also abbreviated.

Original Post
The (London) Telegraph is reporting:
Chemical weapons produced at the Al Muthanna facility, which Isis today seized, are believed to have included mustard gas, Sarin, Tabun, and VX. 
At the linked article, according to the CIA:
Stockpiles of chemical munitions are still stored there. The most dangerous ones have been declared to the UN and are sealed in bunkers.
Although declared, the bunkers contents have yet to be confirmed.
These areas of the compound pose a hazard to civilians and potential blackmarketers.
And the location:
The remaining chemical weapons from Saddam Hussein's regime are stored in two sealed bunkers, both located at the Al Muthanna Chemicals Weapons Complex, a large site in the western desert some 80km north west of Baghdad.
This was the principal manufacturing plant for both chemical agents and munitions during Saddam Hussein’s rule.
Thousands of tonnes of chemical weapons were produced, stored and deployed by the Saddam Hussein regime. Iraq used these weapons during the Iran - Iraq War (1980 to 1988) and against the Kurds in Halabja in 1988. 
All this time I was led to believe by mainstream media, and Congress, that Saddam Hussein had no chemical weapons.

This story is also being reported in the WSJ.

He Throws Maliki Under The Bus

In his own words, "I've decided to throw Maliki under the bus." 

And, "I'm gonna send some ground combat troops back in."

I'm waiting for video of the helicopter evacuations. 

Pipeline: The Need For Speed -- June 19, 2014

I've posted this video so many times (the one down below), it's getting "old" for some of you, but I never tire of it. But today there's a reason for posting it.

I track "The Big Stories" here. Under "US Energy Revolution," I have a link to "Pipelines." When I started the blog on the Bakken, I knew the pipeline story had to be followed. Trying to figure out Enbridge and how the company was structured was one of my early posts. I believe Enbridge was the only non-oil-and-gas-exploration-and-production company that I listed among the operators. At the time I don't think I even knew who was building the Keystone XL pipeline. But over the course of blogging about the Bakken, I've followed a couple of pipeline companies, notably Williams Cos and Enbridge. Williams was never particularly exciting, just one of the players. Enbridge was exciting initially but then seemed to just sort of plateau.

Then earlier this week, WMB jumped as much as 24% in share price: in all my years of investing I had never seen that. I posted links to the story. I still don't understand it all but over time it will make sense. Surprisingly, WMB has pretty much held its initial gains.

Then, today, out of the blue, I noted a short note over at Yahoo!In-Play while reading the news on my wife's iPad before getting out of bed:
Enbridge Energy and Enbridge announce equity restructuring: Enbridge Energy Partners and Enbridge  announced an agreement to undertake a restructuring of the Partnership's equity under which its general partner will permanently waive its existing incentive distribution rights in exchange for Class D units and new incentive distribution units. This restructuring will decrease the general partner's share of incremental cash distributions from 48% of all distributions in excess of $0.495 per unit per quarter down to 23% of all distributions in excess of the Partnership's current quarterly distribution of $0.5435 per unit per quarter. As a result, the share of incremental cash available for distribution to holders of Class A common units will increase correspondingly. 
That announcement was released at 1:02 a.m. EDT. I didn't understand it the verbiage, but I did understand the last line:
As a result, the share of incremental cash available for distribution to holders of Class A common units will increase correspondingly. 
EEP already paid 7%. EEP surged 15% at the opening, and came close to holding that gain at the end of the day. I thought a 7% distribution was nice, but what's coming?

Later in the morning, there was more:
Enbridge Energy announces drop down of additional interests in its natural gas business to Midcoast Energy Partners: Midcoast Energy Partners (MEP) announced that it has agreed to acquire from its affiliate Enbridge Energy Partners a 12.6% limited partner interest in Midcoast Operating for $350 mln in cash, which will bring the Partnership's total ownership interest in Midcoast Operating to 51.6%. This transaction is expected to close on or about July 1, 2014 and represents the Partnership's first acquisition of additional interests in Midcoast Operating since its initial public offering on November 13, 2013.
Another pipeline story today involved Targa. Bloomberg is reporting:
Targa Resources Corp. rose 20 percent in the final minutes of trading today, while Targa Resources Partners gained 18 percent. Energy Transfer Equity slipped to $53.72 a share, giving the company a market value of about $29 billion.
If an agreement is eventually reached, the purchase would be the largest ever orchestrated by Warren, who expanded Dallas-based Energy Transfer through a $13 billion buying spree in 2010 and 2011, according to data compiled by Bloomberg.
The U.S. shale-fracking boom is increasing fuel supplies and propelling deals among the companies that transport oil and natural gas.
Disclaimer: this is not an investment site. Do not make any investment decisions based on what hyou read here or what you think you may have read here.

Pipeline, Stevie Ray Vaughn and Dick Dale

There are several story lines and several reasons I can think of why there is this interest in pipelines all of a sudden but I would probably only embarrass myself if I listed them so I will hold off for now. Maybe later if I remember. 

Motley Fool asked the question: "why did EEP and EEQ pop today?" This was the answer:
One of the goals here is to increase liquidity to fund a multi-billion dollar liquids pipeline at Enbridge Partners while still holding an economic interest in the mid-stream natural gas business. Incrementally the deal will add liquidity, but the bigger driver of value long-term comes from a pipeline replacement plan that could cost $7.5 billion. At the end of the day, I don't think this fundamentally changes the investment thesis in any of these three companies, it just shifts assets around -- something oil and gas companies are doing a lot of these days.
Did that answer your question? No, I didn't think so. Talk about poor analysis. So, if "at the end of the day," it doesn't mean anything, why did EEP jump 14% and EEQ jump 12%? Enquiring minds want to know.


On another note, my thoughts on the Mideast:
Of all the stories out there right now, I'm really curious how Kurdistan will play out. The tea leaves suggest Kurdistan could take this as their best opportunity yet to separate from Baghdad completely. They won't get US support (but Obama has flip-flopped so much they probably don't pay much attention to hm any more anyway) but they might get Turkish help. Turkey is probably now more concerned about ISIS than the Kurds. Turkey has always had an Islamist problem and it's gotten worse since I retired from the USAF. I think Turkey has a bigger risk of insurgency than Saudi Arabia.

I was just ready to sign off and then this popped up over at Seeking Alpha:

  • Sempra Energy’s planned Cameron LNG project to export liquefied natural gas from Louisiana wins final FERC approval, becoming the second such facility to win the agency’s backing.
  • The agency votes unanimously to let Cameron LNG move forward after completing an environmental review; the project also has been approved by the U.S. Energy Department.
  • Cheniere Energy's Sabine Pass export plant, now under construction in Louisiana, is the only other facility to win the support of both agencies.
I just talked about SRE yesterday.

For Investors Only

Trading at new 52-week highs: AA (Alcoa), AEP, APC, APA, BHI, BKH, BCEI, CHK, CSX, CVX, COP, CLR, EEP,  Flotek, Genesee & Wyoming, Greenbrier, HAL, HES, KOG, NRG, NFX, NSC, PSX, SRE. Whiting traded near its high.

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.

Amber Renee Back On-Line; Seeking Alpha Look At The Mississippi Lime

Back on line:
  • 18408, 1,945,  Amber Renee 25-36H, Sanish; one mile to the west of the Chandler James; t2/10; F; 821K 12/13 -- 661K in first two years; no pump; still 9K/month 1/13; IA 1/14; now back on line apparently (shown as "A" but still no new production except a bit of natural gas sold in 4/14);
A Look At The Mississippi Lime Over At Seeking Alpha

Puts the Bakken into perspective:
Here is a list that I've cobbled together of companies that have decided to exit the Miss Lime:
Royal Dutch Shell - In September of 2013 Shell announced that it was selling off its huge 600,000 acre Miss Lime position which was located in Kansas. Included in what was sold were 45 producing wells that Shell had drilled. In July of 2013 Shell completed a strategic review and concluded that the Miss Lime did not meet the company's internal profitability targets.
Encana - Under a new CEO (Doug Suttles) Encana has wisely decided to narrow its focus considerably. Instead of trying to spread capital across 20 different plays, Encana has decided to concentrate on its five best liquids rich assets. One of the plays that Encana has decided to exit is its position in the Miss Lime located in Oklahoma.
Sandridge Energy - Sandridge hasn't exited the Miss Lime, but it has greatly narrowed its focus. A great portion of Sandridge's massive acreage position that was originally thought to be high quality, actually isn't. Out of the nearly 1.85 million acres that Sandridge has in the Miss Lime, the company has narrowed its focus to six "focus areas". Those areas include the counties of Comanche, Barber, Harper, Woods, Alfalfa and Grant.

Update On Refinery Construction In The Bakken; Iraq's Maliki Thrown Under The Bus -- It's June 19, 2014

Vanity Fair is reporting that Dubai is now the world's busiest airport, surpassing Heathrow. I think the US would have the biggest airport if it only had one major airport for the entire country, too. The big question is what percentage of travelers going to Dubai actually stay in Dubai. Memo to self: insert the "LOL" emoticon here.

Capturing that Benghazi yahoo the other day can't help but remind folks of the greatest movie ever, Casablanca. "Holder, round up the usual suspects. And by the way, good work on the Lois Lerner tapes." LOL.

TPLM is up over a percent in pre-market trading this morning. 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. 

The first story I saw this morning was the $56/bbl story and the implications for Mr Maliki. Then the WSJ reports that the Obama administration has thrown Mr Maliki under the bus. Geo-political events are moving very, very quickly. The widening of the Brent-WTI spread is the data point to watch in the near term.

Crude oil futures: I see the Yahoo!Finance number is incorrect (again). Bloomberg continues to be the better source for this data. The Brent-WTI crude oil spread is widening a bit; now about $6.50 instead of trending to $5 or lower as it was before the Iraqi insurgency.

Active rigs:

Active Rigs189186213173129

RBN Energy: an update on the new refinery construction in the Bakken. New construction probably not gonna happen in my investing lifetime.

The Wall Street Journal

President Obama throws Iraq's Maliki under the bus. I assume the administration would prefer someone like Abu Bakr "See You In New York" al-Baghdadi, if for no other reason, he has the better surname. I can't make this stuff up.

Insurance premiums rise at big insurers; fall at small rivals under ObamaCare. It doesn't take an actuarial expert to predict how this will play out.

Fed keeps rates low (market surges); sees "eventual rise" in 2015, 2016. It's very possible I won't see meaningful / significant rate increases in my investing lifetime. I only saw the "2015" yesterday but now with "2016" on the table, that really changes things.

Yes, I see the Senate action the Keystone, but I'm not going to post anything more on it today.

They're still around, apparently. US authorities detain 89-y/o who may have been a Nazi death camp guard.

The battle for that Baghdad refinery apparently continues.

GM ignored early warming on stalling. My advice: erase the hard drives. Lois will tell you how it's done.

Also, customers are reporting more problems with new cars than usual; mostly tied with new technology like phone pairing and voice recognition. "Slow down, brake." "Did you say, "Snowden Lake?"

S & P sets another record.

IRS eases rules on accidental "tax cheats." Mostly affects Bakken millionaires who inadvertently  forgot to tell the IRS they banked a lot of royalty money overseas.

The Los Angeles Times

Nothing of interest.

Jobless Claims Go Down -- Numbers Signal Sustained Progress In The Labor Market

Boiler plate:
US jobless claims decreased this past week holding down this year’s average and signaling sustained progress in the labor market.
The four-week average of claims, a less-volatile measure than the weekly figure, declined to 311,750 from 315,500 the week before.
The Labor Department revised the prior week’s reading to 318,000 from an initially reported 317,000. 

Bloomberg is reporting:
Jobless claims fell 6,000 to 312,000 in the week ended June 14, the Labor Department reported today in Washington. The median forecast of 50 economists surveyed by Bloomberg called for 313,000. The total number of people collecting benefits decreased to the lowest level in almost seven years
... that's because Congress has not extended benefits for the long-term unemployed.

So, the overall number is still above 300,000 but Bloomberg notes that the total number collecting benefits is at its lowest level in "almost" seven years, but doesn't explain why. Okay.

The market "likes" that number: futures are up. The Fed, I assume, had access to this data yesterday, and thus knew they weren't going to raise rates until 2015 or now, maybe not even until 2016.

Update On Refinery Construction In The Bakken

Yesterday (or the day before, I forget) there was an announcement by Quantum Energy that the company had plans to build five new refineries in the Bakken. I opined that I doubted I would see any of them in my investing lifetime. RBN Energy appears to agree. For an update on these refineries and the others under construction in the Bakken, go to this link.

Crude Oil: $56/Bbl -- Israel Got A Pretty Good Deal; A Growing Kurdistan-Turkish-Israeli Economic Alliance


June 22, 2014: an older story that suggest I was not far off the mark -- the growing relationship between Turkey and Israel (and, of course, now I think one can add Kurdistan to the mix). Bloomberg is reporting:
Turkey and Israel may soon renew diplomatic ties, suspended after Israeli commandos killed nine Turks in a raid on a Gaza Strip-bound flotilla, Turkish Foreign Minister Ahmet Davutoglu said.
Turkey’s willingness to renew ties with Israel is being fueled by the domestic troubles of Turkish Prime Minister Recep Tayyip Erdogan, and the prospect of a pipeline shipping Israeli offshore gas to Turkey, analysts say.
Also, see a short blurb at this post.

June 20, 2014: it looks like that $56 oil found a home -- Israel.  BusinessInsider is reporting:
The first tanker to carry Kurdish pipeline oil is still homeless after loading in May. After a false start sailing to the United States, the United Leadership tanker turned back towards Morocco, where it is anchored after local authorities refused to let it discharge for the Mohammedia refinery.
The SCF Altai did not arrive directly from Ceyhan.
The United Emblem was the second tanker to load crude at Ceyhan from the KRG pipeline at the start of last week. It then made a ship-to-ship transfer near Malta to the SCF Altai during June 14-16, local shipping and market sources said and ship tracking showed.
Israeli refineries have taken Kurdish crude oil before but in small volumes, which were shipped to Turkish ports by truck. Some oil has also been stored there.
The KRG began exporting a small volume of its Taq Taq crude grade by truck to Turkey in early 2013 and then added another grade Shaikan at the start of this year.
Original Post

 This is a very interesting geo-political story. How it plays out will depend on:
  • how much influence the US has any more among the players (very little)
  • how the players see the Iraqi insurgency playing out
This is the story:
  • Kurdistan ships oil through a pipeline on an irregular basis to a Turkish port
  • the Kurdish oil is loaded onto a tanker and sold to the highest bidder
  • by "agreement," Baghdad and Kurdistan share the profit (I believe the Kurds get about 17%)
  • there is currently a tanker on the Mediterranean Sea filled with Kurdish oil
  • Kurdish will claim 100% percent of the profit of that oil IF sold
  • if the oil is sold and the Kurds take the 100% profit, Kurdistan independence is hastened
  • Baghdad and the US have strongly warned buyers NOT to support the Kurds in this "unilateral theft" of Iraqi oil 
Bloomberg is reporting.