Nine (9) New Permits -- North Dakota; For Investors, Seeking Alpha Explains Why VLO Was Hammered Today; PSX Slid Over 4%

Wells coming off confidential list Thursday:

• 25965, 1,112, CLR, Rehak Federal 4-25H, Alkali Creek, t5/14; cum --
• 26498, drl, Hess, GN-Ringabeu-158-98-1102H-1, Rainbow, no production data,
• 27104, 183, Petro Harvester Operating, Bratland 3-1H, Portal, a Madison well, t3/14; cum 21K 5/14;

Active rigs:

	6/25/2014	06/25/2013	06/25/2012	06/25/2011	06/25/2010
Active Rigs	192	187	213	170	124

Nine (9) new permits --

• Operators: Hess (4), KOG (3), EOG, American Eagle
  Fields: Big Butte (Mountrail), Truax (Williams), Parshall (Mountrail), Skjermo (Divide)
• Comments:

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

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For Investors

This Explains Why Shares Like VLO Were Hammered Today

From SeekingAlpha:

Eagle Ford condensate producers win, refiners lose in oil export decision

• The decision to allow two Texas companies to export condensates looks like a win for Eagle Ford Shale crude producers at the expense of refiners and companies planning to build processing plants along the Gulf coast.
• Today's selloff in refiners reflected concern that the groups will lose some of their competitive edge if condensate exports become common: Valero Energy, the largest U.S. refiner, dropped 8.3%, PBF tumbled 10.72%, PSX fell 4.2%, and HFC slid 6.7%.
• Oppenheimer notes that Pioneer Natural Resources PXD, DVN, MRO, COP and MUR produce the most Eagle Ford condensate, and could benefit if U.S. condensate prices close some of the gap with European prices; EOG, the largest Eagle Ford producer, produces little condensate and likely benefits little from the lifting of the condensate ban.
• Investor reaction toward Gulf Coast gathering and processing MLPs such as EPD, MMP, KMP and NGLS was more muted, since plans to build splitters in Texas may be undermined by even modest rule changes in the crude export ban that allow Eagle Ford producers to sell condensate after running it from the wellhead to their own nearby - and much cheaper - distillation towers.

My hunch: at the end of the day (but that may be several months/years from now) this will have less impact on the refiners than the price of oil and whether they can pass on high price of gasoline to consumers. But it certainly explains why VLO was hammered today.

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. VLO getting hammered today reminds folks to stay diversified. 

Update, June 26, 2014: RBN Energy provides background, insight, analysis to this week's story about the US lifting the four-decade ban on oil exports.  Unfortunately RNB posts are generally only available for a short period of time before they disappear, and become available only by subscription. 

North Dakota Approves Enbridge's Sandpiper Pipeline, June 25, 2014

I track "pipelines of interest" here.

This is the blurb on the Enbridge Sandpiper pipeline prior to being updated today:

Enbridge

Sandpiper
 Enbridge Light Oil Market Access Program
Western Canada to Montreal, Quebec

Comment: this is a key line taking Bakken oil to Superior, MN, where it would hook up with Line 5, to get crude oil back into Canada. (Map here; because the link is to a regional media source, the link will probably break)

Unofficial "Go-By" Name:

Announced:
Expected completion: 2016

Originator: Enbridge

Pipeline: crude oil

Specs: $2.6 billion

Origin: Beaver Lodge Terminal, Tioga, North Dakota

Terminus: Superior, WI, Terminal via Clearbrook, MN

Length: 600 miles

Capacity: 225,000 bopd (approx 20% of Bakken output)

Comments:

Concerns: northern Minnesota activists in Clearbridge area

Status:  initial application was not approved by FERC in March, 2013; Enbridge says project remains on schedule.  Update, October 29, 2013: The Bismarck Tribune reports that the Minnesota PUC will take a year to listen to local farmers who oppose the pipeline. 

Update: The Dickinson Press is reporting today (June 25, 2014)  that North Dakota has approved the Enbridge Sandpiper:

During a regular meeting today, North Dakota’s Public Service Commission approved construction of the $2.6 billion Sandpiper pipeline.

The pipeline will extend through 10 northern North Dakota counties, starting at the Beaver Lodge oil and gas field near Tioga. It is planned to reach a terminal in Clearbrook, MN, and end at a terminal in Superior, WI.

New pipes, ranging from 24 inches to 30 inches in diameter, will allow oil to be shipped to Canada, and the southern and eastern United States. Canadian energy delivery company Enbridge will supervise pipeline construction.

Do NOT confuse this pipeline with the Enbridge Clipper pipeline which runs from western Canada to Illinois. That pipeline is also tracked at the linked post at the very top.

It appears that Minnesota PUC is almost ready to approve their portion; they appear to penciling in the final route through Minnesota. A big "thank you" to Don for finding this article. NorthlandNewsCenter is reporting:

But construction of the proposed Sandpiper pipeline, which would bring oil from the Bakken fields of North Dakota to Superior, would be more than just a job creator, say officials.

Lorraine Little, of Enbridge Energy, says construction of the $2.6 billion project alone would bring about 1,500 good paying construction jobs.

"And then it also means economic spin–off for the communities that will see that construction, and that's people staying in hotels, and eating at restaurants, and buying gas, and those kinds of things," said Little Friday, "so it's bigger than just the workers that will be on the pipeline. There's a lot of spin–off in the community."

The Sandpiper line has not been approved, and the public comment period had been extended from April to the end of May at the request of environmental organizations like Honor the Earth, and the Friends of the Headwaters group.

Both organizations are encouraging people to learn more about proposed alternate routes for the Sandpiper that would divert the course closer to the Twin Cities.

The PUC will decide if it will consider alternative routes in mid–July.

For Investors Only -- June 25, 2014 -- Schlumberger Is Up As Much As 6%

Trading at new 52-week highs (a very, very small number of new highs; suggesting .... ??):
BK, EPD, OKE, SLB.

Schlumberger is up as much as 6%. Remember, this is a very large, mature company. There are very few companies in mining, manufacturing, oil, etc., this huge, this mature, that have spikes like this. The reason, the fly on the wall is reporting:

Schlumberger and its peers are rising after the oil and gas services company provided long-term profit guidance. WHAT'S NEW: At an investor conference earlier today, Schlumberger predicted that its earnings per share would increase at a compound annual growth rate of 17%-20%. In a note to investors earlier today, RBC Capital analyst Kurt Hallead wrote that the Street was expecting the company's EPS to grow at an annualized rate of 15%. 

Schlumberger predicted that its 2017 EPS would be $9-$10. The company said it could achieve its guidance through revenue growth, margin expansion, and share repurchases. Sclhumberger added that it expects oil markets to be "well-balanced" through 2017. It predicted that spending on exploration would be "subdued" in 2015, but it expects a renewed focus on exploration in 2016-2017.

WHAT'S NOTABLE: Before Schlumberger announced its guidance today, Hallead predicted that the company's EPS would reach $8 in 2016. PRICE ACTION: Near noon, Schlumberger climbed 5% to $112.25. Other companies in the sector also advanced, with Baker Hughes  rising 1.9% to $72.77, Halliburton  gaining 1.8% to $69.39, and Weatherford adding 1% to $22.67.

But "that explanation" begs the question, "why." I posted my personal thoughts on this on June 20, 2014, and was quite specific.

Largest-Ever Fertilizer Plant Has Final Approval; Construction Must Start Within 18 Months

The Jamestown Sun is reporting:

The North Dakota Department of Health issued an air pollution control permit to construct for the proposed CHS nitrogen fertilizer plant at Spiritwood on June 20.
the permit covers construction and operation of the plant but requires construction to begin within 18 months.

The proposed plant would utilize natural gas produced in western North Dakota to produce nitrogen fertilizer. The original cost estimates for the plant totaled about $1.2 billion but have increased to nearly $2 billion. The project would be the largest ever constructed in North Dakota, if built.

Looks like an opportunity for a poll. 

Eagle Ford Minerals Going For $70,000 / Acre? - June 25, 2014

I'm not convinced the Eagle Ford, section vs section, is that much better than the Bakken. Time will tell.

Bakken mineral acres have probably sold in the range of about $2,500/acre, average, as a round number, over the years from the better Bakken to the best Bakken. There have been some "astronomical" prices paid for small parcels in more recent times. You can search the blog for examples.

So, how much is the Eagle Ford going for?

Zack's is reporting:

Exploration and production (E&P) company, Encana Corporation declared the closure of 45,500 net acres of Eagle Ford properties’ acquisition from mineral explorer Freeport-McMoRan Copper & Gold Inc. Encana paid roughly $3.1 billion in cash for the purchase.

BOTE: $3.1 billion / 45,500 acres = $70,000 / acre.

No New Forms In The File For Marathon's 2nd Tyler Well; No New Data; Comes Off Confidential List Today

The file report on MRO's second Tyler well in southwest North Dakota:

• 26355, drl, MRO, Powell 31-27TH, wildcat, Tyler formation, 1280-acre spacing,

No geologist's report yet, no results. Just the planning forms.

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Mexico Unlikely To Reach Production Goals

Puts The Bakken (and Free-Market Capitalism and Strong Work Ethic) In Perspective

Platts is reporting:

Delays in implementing Mexico's sweeping energy sector reforms will prevent the country from producing over 3 million b/d until at least 2020, an executive with the country's state oil company Pemex said Tuesday.

"We can increase, of course, but not enough to arrive at 3 million [b/d]," Fluvio Ruiz Alarcon, a professional and independent board member at Pemex, said on the sidelines of a Wilson Center event on Mexico's energy reform. "I'm sure we're going to produce over 3 million [b/d] but not by 2018. Maybe 2020, but not before."

Mexican President Enrique Pena Nieto set the 3 million b/d by 2018 production goal as the country's Congress passed a reform bill to end Mexico's 75-year state oil monopoly in December. But hurdles in finalizing the secondary legislation needed to implement the reforms, a process which includes modifying or creating 21 separate laws and faces significant opposition from the country's pro-business national action party (PAN), have already made this goal seem highly unrealistic.

And then this:

"A lot of us didn't understand how hard it would be to get the secondary legislation passed," said Duncan Wood, director of the Wilson Center's Mexico Institute. "This is far from being a done deal, this is far from over."

New technologies and partnerships with some foreign firms could boost production in the near term by roughly 200,000 b/d, largely in mature, established fields, according Marcelo Mereles, a partner at EnergeA and a former Pemex international affairs advisor.

But production in undeveloped fields, in the Gulf of Mexico or in fields abandoned by Pemex will likely not be close to development by 2018, Mereles said.

Quick: how much oil did Mexico produce on a daily basis in 2012 (all that Gulf of Mexico oil; those huge basins)?

• 2.6 million bopd. The entire country of Mexico, on-shore and off-shore.

Compare to North Dakota:

• in excess of one million bopd and only a handful of western counties in one state.

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Mike Filloon's Bakken Update

Unless I missed it, not much about the Bakken. Rather, a passing reference to "Bakken technology" being taken to Texas, and then a very, very long review of shale operations in Texas:

At Split Rock, we try to diversify our dollars across different U.S. basins. By doing this, we gain exposure to the best areas and operators in differing locales. Diversification is important, as it limits our downside, which is important in a volatile sector.

The Eagle Ford is difficult, as the bulk of production growth and downspacing has occurred. We do like the play, but have more difficulty in finding solid operators with good prospects. We believe Matador Resources may be one of the best ways to gain exposure to the Eagle Ford. We also like its exploratory program in the Permian. There is more than just acreage and geology to be considered, as we believe Matador is a top notch operator. It has an excellent well design, which probably evolved from its non-operated acreage with EOG Resources.

As we have said before, EOG continues to be the best unconventional operator in the United States. This has paid dividends for Matador, and in our opinion may continue to do so.

Collapse (Their Word, Not Mine) Of The Economy Due To Cold Weather, Not ... Global Warming ..

Updates

June 29, 2014: I should devote a blog entirely to how the Bakken saved the US economy. Again, remember, I'm talking about all three Bakkens: a) the geographical, oil-producing Bakken centered in two or three counties in western North Dakota; b) the incredible working relationship between the industry and government to make it possible; and, c) the technology and processes worked out in North Dakota and then used elsewhere, the "Bakken laboratory."

Here's another example: the new Weatherford facility in Katy, TX, which one could argue is a direct result of the three Bakkens. FuelFix is reporting (with a great video):

The new facility — built at a cost of about $100 million — is the latest manufacturing plant in the area for the Houston-based oil field service company and represents the company’s belief that demand for its production technology is on the uptick.

Every month, it turns out 120 pump units — the iconic machines also known as pump jacks, nodding donkeys, thirsty birds or rocking horses — that rock back-and-forth in a process used to pull liquid from an oil well when there’s not enough pressure for it flow to the surface on its own.

Today, the facility, which opened in January, employs 135 people, but Weatherford executives say they expect to have 335 people here by the end of next year, and it could eventually employ 500.

Original Post

[The "big story" that was not reported elsewhere is reported at the very end.]

This was the "forecast" early this morning prior to the actual release of the revised 1Q14 GDP:

U.S. stock index futures pointed to a higher Wall Street open on Wednesday, ahead of the release of the final estimate for first-quarter gross domestic product.

The GDP report is expected to reveal a sharper contraction of around 1.8 percent, rather than the annualized 1.0 percent previously indicated.

"Since the preliminary report, data have continued to surprise to the downside, with the trade balance widening sharply and core retail sales posting a decline in May," wrote Bill Diviney and Kevin Norrish in a Barclays research note on Wednesday. 

Like you, I can only imagine your surprise to see that analysts expected that contraction of the 1Q14 GDP was worse than originally reported. The bar graph below is all under the Obama administration: 13 consecutive quarters; a trillion dollars in stimulus; and monthly boiler-plate after monthly boiler-plate that the economy is improving. Seriously? UC Irvine? Really?

But then this, the Reuters headline (note the word "collapses" -- a word I haven't seen used to describe the economy in quite some time: "US economy collapses in first quarter, but growing again." [A reader pointed out that the last time we saw a "collapse" in the economy was about the time Mr Obama came into office. So, I guess 2014 (now) and 2009 (then) could be considered "in quite some time." And, of course, that "collapse" was not in the middle of a "recovery."]

The U.S. economy contracted at a much steeper pace in the first quarter than previously estimated, turning in one of its worst-ever non-recession performances, but growth already appears to have rebounded strongly.

And then this, from the CNN business analyst: "don't freak out about a minus 3% GDP (rounded)." The CNN business analyst's summary:

The same old story remains: "This recovery is underway, but it's choppy and still very slow."

Seriously? UC Irvine? Really?

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The Irony

The analysts blame the collapsing economy (their word, not mine) on ... drum roll ... cold weather. As long as I've been investing (since 1984) I do not recall ever -- ever -- that a "collapse" (their word, not mine) of the economy was due to cold weather. 

We have been told that the biggest threat to the US economy is the threat of global warming. And now we learn that the collapse (their word, not mine) of the economy in the 1Q14 was due to cold weather, not global warming. I can't make this stuff up.

The house of cards continues to topple.

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The Irony

Then, think about this. The folks forecasting the GDP (almost in real-time), incredibly off the mark, are the same folks telling us that two centuries from now global warming will result in oceans coming up halfway to the top of the Statue of Liberty (cover of National Geographic). I can't make this up either: google "National Geographic cover Statue of Liberty global warming."

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The Big Story Missed By Everyone

Now, ask yourself: how badly would the contraction have been had it not been for the Bakken, the Eagle Ford, and the Permian? More importantly, how many earlier quarters would have had negative GDP had it not been for the oil and gas industry? No one is talking about that inconvenient truth. 

With the question, the US rail industry was "saved" by the Bakken. Without question, the US steel industry was saved by the Bakken. Without question, there would be hundreds of thousands more Americans unemployed if it had not been for the Bakken.  

For The Archives: Chesapeake's Spin-Off At The End Of The Month, June, 2014: SSE

In case I forget what this is all about, this is being posted for the archives Chesapeake will spin off a small oil services unit/company at the end of the month. From SeekingAlpha:

As of June 1, 2014, SSE's marketed fleet consisted of 20 Tier 1 rigs, including 10 proprietary PeakeRigs, 57 Tier 2 rigs and 9 Tier 3 rigs. It also owned nine hydraulic fracturing fleets with an aggregate of 360,000 horsepower, a diversified oilfield rentals business, and an oilfield trucking fleet consisting of 260 rig relocation trucks, 67 cranes and forklifts used in the movement of drilling rigs and other heavy equipment and 145 water transport trucks.

The four business units of this new spin-off/company:

• NOMAC Drilling
• Performance Technologies
• Great Plains Oilfield Rental
• Hodges Trucking Company/Hodges Oilfield Trucking Solutions

The ticker symbol will be SSE.

And I just love "google." I was curious how many shares of SSE one can expect for each share of CHK. This is the answer as of March 14, 2014 (I can't make this up; it's a cut and paste from the source):

A timeline wasn’t stated, but it was stated under terms of the spin-off that CHK shareholders will receive one share of SSE for every yet-to-be determined number of CHK stock held on a yet-to-be announced record date. 

That's sounds like an Obama speech without the apology for all of America's transgressions.

Surely we can do better.  Oh, there it is, right in the Seeking Alpha article (I missed it the first time):

CHK's shareholders will receive one share of SSE common stock for every 14 shares of CHK common stock held at the close of business on the record date of June 19, 2014. The distribution is expected to occur following the close of business on June 30, 2014.

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

[Note: comments are not google-searchable, so I need to bring this comment up here, so I can find it again. It's intriguing:

For great coffee order directly from Filadelfia Coffee Plantation in Antigua, Guatemala. My wife and I toured the plantation in February and have been ordering the coffee directly from them since. We order the Genuine Antigua 6 pack 12 oz packages for $54. No postage charged and you receive the coffee in 3 days. These are whole beans so all you need is a grinder to grind them each morning.]

Wednesday -- June 25, 2014; Great RBN Energy Post On Getting Canadian Crude (Which Doesn't Explode) To The Gulf Of Mexico

Active rigs:

	6/25/2014	06/25/2013	06/25/2012	06/25/2011	06/25/2010
Active Rigs	194	187	213	170	124

RBN Energy: getting Canadian crude oil to the Gulf of Mexico.

Much of RBN’s forecast 1.4 MMb/d expansion in Canadian crude production between 2014 and 2019 is expected to come from oil sands bitumen in Western Canada. An increasing proportion of this crude has to find its way to refineries configured to process this type of crude on the Gulf Coast. But pipeline capacity on that route is in critically short supply.  An important set of expansions to existing Enbridge and Enterprise pipelines between Canada and Texas, parts of which are set to come online soon, hopes to alleviate the situation. Today we wrap up a two part series describing these projects and their impact.

First, the recap:

In Part 1 we described plans to expand the Enbridge Western Gulf Coast Access System (WGCAS) to deliver as much as 800Mb/d of crude from Western Canada to the Texas Coast. This system expansion has become increasingly important to Canadian shippers because of continued delays in permit approval for the rival TransCanada Keystone XL pipeline. The WGCAS system has three sections. The first is the 2.5 MMb/d Enbridge Mainline that stretches from Edmonton, Alberta across the US border to the Chicago, IL region and delivers crude from Western Canada and the Bakken to the US Midwest and Eastern Canada. The second section is the Enbridge Spearhead pipeline between Chicago and Cushing, OK. The third is the Enbridge/Enterprise Products Partners 50/50 JV Seaway pipeline between Cushing and Freeport, south of Houston on the Texas Gulf Coast. Although the pipeline capacity on Spearhead is the weakest link in the current WGCAS, we explained that Enbridge has to expand the whole system, including sections of the Mainline north of Chicago to accommodate expanded demand from Canadian producers. Expansions to one of those northern sections, the Alberta Clipper, have been delayed until late 2015 by permit issues. In this episode we describe the two new build sections of the WGCAS between Chicago and the Gulf Coast and discuss the overall impact of the expansion.

Today's post discusses Flanagan South and the Seaway Twin.

Memo to self: article has been saved.

The Wall Street Journal

The big story that we started posting / linking last night: US ruling loosens four-decade ban on oil exports. Fourteen hours later, this is now an "old" story.

The MDW predicted this a long, long time ago: "sicker" and "at risk" consumers more likely to enroll in ObamaCare. Well, duh. People enrolled in new plans under the health law are showing higher rates of serious health conditions than other insurance customers, according to an early analysis of medical claims, putting pressure on insurers around the country as they prepare to propose rates for next year.

It seems like this story has been reported for the past three days, but it's again in the front section: new-home sales soar in May.

For air travelers about to embark on their family summer vacation, it's nice to know that a federal judge, a single individual, agrees with the ACLU, and has said the US government's practice of putting passengers on "no-fly lists" is unconstitutional. Just one more reason why we're driving to California this year. Not really, but it's fun to say that.

GOP is shouting louder on missing IRS e-mails. Glad to hear the GOP is finally doing something about this. The shouting will last through July and then everyone goes on August vacation.

Here it comes: Legislators facing a $1.5 billion budget gap in Pennsylvania are considering imposing a new tax on natural-gas production; the UK did that on North Sea drilling and came close to destroying the industry; London now scrambling to backtrack hoping drilling picks up. (Actually, I lost the bubble on that story; I could be way wrong; don't quote me on it.)

Losses in Iraq spur US to re-think Syria. Meanwhile, John Kerry is polishing another draft of his global warming speech.

Finally, the government decides to commence airstrikes in Iraq; oh, never mind. Those were Syrian warplanes, not American, that struck western Iraq yesterday.

Kurds signal loyalty to "Iraq," but not to Maliki.

Tribes once loyal to Baghdad give fealty to militants. Are we starting to see a trend here? I look for Mr Maliki to request political asylum in some friendly country. He will bring about $50 billion in unmarked $20-bills (US) with him. His family and entourage will have another $100 billion. The rumor is that Mr Maliki has requested his aides translate the wikipedia entry regarding the political asylum of the Shah of Iran.

Top story in the second section: "Fracked Oil Proves Volatile." I posted a stand-alone post on this story earlier; simply scroll down until you see the exploding post.

I guess even the federal government is getting tired of all these recalls: federal regulators have warned that airbags in millions of cars could explode (sort of like fracked oil, I suppose) but have not ordered a formal recall.  I assume Government Motors said no mas. Actually, the fact is this: one more major recall and the only cars on the US highways will be the "Bolt" from Tata Motors and old Ford Pintos.

Here we go again, another company looking to move overseas to avoid US corporate taxes: Walgreens. The secret here is to do this quickly before Congress finds out about this newest fad to avoid corporate taxes. In the old days, US corporations just parked their money overseas; now they are parking their entire headquarters overseas.

The Los Angeles Times

Top story is all about all the elections. Boring.

But we have the new name for the uncivil war in Iraq: the Sunni Awakening. In downtown Baghdad, The Big Sleep.

And the rest is all sports, or horticulture, or restaurant reviews.

Starbucks

I don't know if the new Starbucks prices will affect me or not (I only order a "tall dark" -- I used to order a "tall Blonde" but never got what I expected). But I'm starting to enjoy my own coffee at home and $0.10 worth of butter toast and $0.65 cents worth of corn flakes instead of the $2.45 chocolate croissant, so it's possible I will be visiting Starbucks less often. For the past two weeks, my time at Starbucks has been considerably lessened, and I have survived rather nicely. So, we'll see. Yesterday, I did stop at Starbucks to get a glass of water while biking in somewhat hot Dallas weather. Just before the thunderstorms. There's a lot of chatter why Starbucks is raising their prices: it has nothing to do with the cost of the commodity. Some associate it with the company's new program to send all their baristas to college on a Starbucks scholarship or the new $15/hour minimum wage in Seattle. One would think the latter would only affect Seattle coffee shops, but it turns out there are so many Starbucks in Seattle, that at $15/hour minimum wage, the company has to raise coffee prices worldwide to come up with the cash to pay Seattle baristas. At $15/hour not much need to leave tips any more. The company will not be raising prices on their K-cups which haven't been selling all that well, apparently. I've never asked if one can get a tall blond in K-cups.

It's Not Just Bakken Crude Oil That Tends To Explode When CBR Leaves The Rails -- June 25, 2015

The Wall Street Journal is posting what I think is fairly obvious: it's not just Bakken crude oil that tends to explode when CBR leaves the tracks. Crude oil from almost any shale play in the US will tend to do bad things when a unit train derails.

Millions of barrels of crude oil flowing from shale formations around the country—not just North Dakota—are full of volatile gases that make it tricky to transport and to process into fuel.

Oil from North Dakota's Bakken Shale field has already been identified as combustible by investigators looking into explosions that followed train derailments in the past year.

But high gas levels also are affecting oil pumped from the Niobrara Shale in Colorado and the Eagle Ford Shale and Permian Basin in Texas, energy executives and experts say. Even the refineries reaping big profits from the new oil, which is known as ultralight, are starting to complain about how hard it is to handle with existing equipment. Some of what is being pumped isn't even crude, but condensate: gas trapped underground that becomes a liquid on the surface.

But, folks, this is the bigger story:

The federal government says 96% of the growth in production since 2011 is of light and ultralight oil and that is where growth will continue.

The huge volume of this gassy new oil has created a glut, pushing prices to $10 or more below the level of traditional crude. Energy companies think they could get higher prices by sending the new oil abroad, which explains some of the push to lift a U.S. ban on exporting crude. Federal officials recently gave two companies permission to export condensate under certain circumstances.

And that's why the US government, after almost forty years, has quietly lifted the ban on exporting oil.

I guess they want other countries to experience the thrill of exploding crude.  

There are several other story lines in this article, all of which have been discussed ad nauseum on this site, so I won't go into it again.