What Some Of Us Will Be Talking About Friday -- October 16, 2014

Updates

October 17, 2014: there you have it -- housing starts beat expectations.

US housing starts rebounded at the end of the third quarter, reflecting mostly strength in apartment construction, while key single-family starts remain subdued.

Builders broke ground on 1.017 million new construction sites in annualized terms in September, 6.3% more than a month earlier, slightly above the expected 1.008 million housing starts and following a fractionally revised 957,000, data from the Department of Commerce showed on Friday.

Authorities issued 1.018 million new permits for construction, also mildly better than the expected 1.03 million, up from 1.003 million in August.

The data is known for its high volatility - all the monthly changes reported in September were within the margin of error - and the figures are poised to be revised in subsequent reports. The latest revisions added a net 18,000 starts and 5,000 permits to the tally of the past couple of months.

Also, September marked the third time this year that the number of starts exceeded 1 million.

Original Post

San Francisco Giants headed for the World Series. Will play Kansas City Royals. First game Tuesday.

Watch for this tomorrow, Friday: housing starts. WSJ estimates exactly one million -- which, if it happens, will impress investors.

Mortgage rates fell to their lowest level since June, 2013 -- rates are now below 4%.

The Wall Street Journal

Top story, page 1: growth fears grip a divided Europe.

Manufacturers, employers remain steady amid tumult; US economic activity appears to be holding steady ...

Los Angeles school superintendent resigns .... amid criticism over the rollout of an ambitious plan to put a personal computing device in the hands of every student in LA.

VP Biden's son Hunter discharged from the US Navy.  (actually US Navy Reserve)

Frustrated Hispanic voters likely to sit out this year's midterm election. My hunch another ethnic group will do likewise -- it's hard to stand in line to vote for some old white man regardless of what party you belong to ... [Update: I posted this October 16, 2014. It was my opinion that the US black / African-American population will not show up in force for the mid-term election. Two days later, October 18, 2014, for the Sunday, October 19, 2014, edition of paper, The New York Times does the story!]

Lots of stories on Ebola..... probably a good night to watch Kill Bill, Mulholland Drive, and Pulp Fiction.

Ebola scare on Air France flight to Madrid. Traveler had recently been in West Africa.

Here we go: some EU countries would likely suffer serious -- repeat, serious -- natural gas shortages if Russia cut off all its gas deliveries for six months -- Russia won't do that -- but it will certainly charge full price -- I suppose EU has laws against gouging....

Gulf states will oppose OPEC output cut ....

The plunge in oil prices and rise of ISIS have emerged as wild cards in the international diplomatic effort aimed at curbing Iran's nuclear program --

Barbie's smile fails to mask sagging results at Mattel. Quick: name the world's largest toy company (it was posted on the blog not too long ago).

Apple unveils new iPad, iMac, Mini.

Story on Chesapeake selling wells, acreage in the Marcellus/Utica -- reported earlier.

Delta Airlines which has more flights to Africa than any other US airline says bookings to not reveal any effect from Ebola fears.

ObamaCare improves earnings for UnitedHealth.

Bargain hunters are pouncing on panic.

Goldman posts stronger results -- 3Q14 net income jumped almost 50%.

Warren Buffett's "huge mistake" on Tesco PLC just got smaller. 

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

The Los Angeles Time

No end to drought seen in this winter's rain forecast.

Mother sentenced to four years in prison for drowning of two children. One can assume she will be out in a year or less on good behavior. What a travesty.

Ice age: Messenger spacecraft spots ice at Mercury's north pole. For graduates of the American public school system, Mercury is a planet in the solar system. Not only that, it's the planet closest to the sun which is very, very hot this time of year.

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

Sixteen Reasons, Mulholland Drive

Sixteen Reasons, Mulholland Drive

Chesapeake Sells Acreage In Marcellus / Utica -- October 16, 2014

Platts is reporting:

Southwestern Energy's CEO on Thursday said the company's $5.375 billion purchase of 413,000 acres of Chesapeake Energy's southwest Marcellus and Utica shale gas leases and wells would be profitable, even as Wall Street investors expressed displeasure at the company's move.

CEO Steve Mueller rationalized the deal by saying he expects natural gas to keep trading around $4/Mcf, but "the market is missing some of the signals" that future demand will be robust.

Either way, "at 3.50/Mcf forever, we still get good returns," Mueller said on a conference call with analysts following the deal's announcement Thursday.

$13,000/producing acre?

Back in April, 2013, Richard Zeits reported in SeekingAlpha reported:

This morning, Southwestern Energy announced a definitive agreement to acquire approximately 162,000 net acres of leasehold located in Northeast Pennsylvania prospective for the Marcellus Shale from Chesapeake Energy and Statoilfor approximately $93 million.

The key acreage is located in Susquehanna, Wyoming, Tioga and Sullivan counties. The acreage is mostly undeveloped - current net production from these properties is approximately 2 MMcf/d from 17 gross wells (1.2 net wells).

The transaction's price may come as a surprise and major disappointment to Chesapeake shareholders as it implies valuation of just $574 per acre (value of existing production is de minimis).

While the acreage is located mostly on the fringes of the Northeast Pennsylvania's dry gas sweet spot, the price still appears surprisingly low, particularly given that the acreage includes 51,000 net acres in Susquehanna County.

To put this in perspective, Cabot Oil & Gas  whose most important asset is its ~200,000-acre leasehold located in Susquehanna just 10-20 miles from the acreage that Chesapeake is selling, is a company with $14.4 billion market capitalization, which exceeds Chesapeake's.

Of Cabot's acreage, only approximately half is currently held by production. Excluding Cabot's production and value of oil properties, the equity market valuation implies over $30,000 per Cabot's undeveloped acre in Susquehanna, a striking difference relative to the price received by Chesapeake.

Timber Creek Oil Field, Hamlet Oil Field Have Been Updated -- October 16, 2014

Link here for Timber Creek oil field. Whiting and Triangle Petroleum have some very nice wells in this small field.

Link here for Hamlet oil field. No new permits in 2014, so far.

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

Flashback

 As mentioned before, I've kept journals / diaries pretty much throughout my life, starting as a freshman in high school.

I am now going through and transcribing them for various reasons. Here is an entry from January 28, 2009. It really is quite amazing:

After months of avoiding the stock market – even refusing to look at monthly statements, I finally looked at my on-line trading accounts. In terrible shape – I have some anxiety – oil is holding at $43 – well off its appropriate value of $75 and crazy high of $145 – and with news that there is a glut of oil, including oil being held in tankers off shore. It will be interesting to follow – craziness in Washington portends bad things for the country.

(Data point: in the $850 billion stimulus bill, only $30 billion for highways.)

Again, that was written in late January, 2009. It helps put things into perspective, doesn't it?

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

Global Warming

Climate Change

Extreme Weather

Ice Age Now

WUWT is reporting:

Here is something you don’t see every day, a satellite image showing a sizable amount of snow cover on the big island of Hawaii.

While snowfall on the big island is nothing new, commonly seen on the mountains on Mauna Loa and Mauna Kea, (top and bottom arrows respectively in the photo) seeing snow this early in the season on the mounatins (sic) is somewhat rare.

Glad to see I'm not the only one with typos.

Thirteen (13) New Permits; BR Will Report A Nice Well Friday -- October 16, 2014

Wells coming off the confidential list Friday:

• 27147, 1,440, BR, Arches 14-35TFH, Keene, t8/14; cum 14K 8/14;
• 27768, drl, SM Energy, Luella 13-35H, Camp, no production data,
• 27824, drl, Statoil, Maston 34-27 7TFH, Banks, no production data,

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

Thirteen (13) new permits --

• Operators: Hess (4), XTO (3), WPX (3), Whiting (3)
• Fields: Robinson Lake (Mountrail, Indian Hill (McKenzie), Reunion Bay (Dunn), South Tobacco Garden (McKenzie)
• Comments: an American Eagle was on the list; it was the same permit issue some time ago; probably a "cut and paste" error

Active rigs:

	10/16/2014	10/16/2013	10/16/2012	10/16/2011	10/16/2010
Active Rigs	189	184	187	195	153

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

Dallas, We Have A Problem

This is why "we have a problem." The New Yorker comes out weekly. It may be the #1 weekly subscribed to in New York City. I don't know. The most read section of The New Yorker is no doubt "The Talk of the Town," a series of short, topical essays at the beginning of every issue. There are usually about five short essays.

This week, the first essay begins:

In early March of 2003, when SARS swept into Hong Kong from Southern China, the streets of one of the world's most densely populated areas were practically deserted. Venders in kiosks sold face masks  and hand sanitizer  to anyone brave, or foolish, enough to leave home. The fear of a new highly contagious disease is understandable, and, with no effective treatment or vaccine for SARS, it was difficult to know what to do. The World Health Organization recommended that officials in the countries most affected warn people with a fever to stay off international flights. Hong Kong went further, using infrared scanners and thermometers to take the temperature of more than thirty-six million passengers as they arrived. Nineteen hundred and twenty-one of them had a fever, and forty were admitted to the hospital. None developed SARS. (Canada and Singapore also scanned arriving passengers. Neither country found anyone with SARS).

Last week, the Obama Administration announced that, at five major US airports, passengers arriving from Liberia, Guinea, and Sierra Leone will be checked for fever. That measure isn't likely to be any more effective at detecting the Ebola virus than it was at finding SARS.

The article goes on for another full page.

By the way, the school which our granddaughters attend here in the DFW metroplex sent out a notice to all parents telling them that two students at the elementary school across town were exposed to nurse #2. They were on the plane with her on at least one of the legs of her trip.

The letter was very, very, very long.

Some schools, I see, in Ohio and Dallas have announced closures. There may be a lot of elementary students taking their classes on-line this year.

Odds And Ends -- Previously In Draft -- For The Archives -- October 18, 2014

Does anyone see the sexism in this:

"I hugged and kissed the health care providers that took care of the Ebola patient -- I didn't kiss the doctors, but I kissed the nurses."  -- President Obama, press conference, earlier this morning. I'll try to get exact quote later; that was typing as fast as I could as I listened to the tape.

For those that missed it, I guess all doctors, in ObamaCare, are male, and all nurses are female.

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

Unraveling

President Obama is in deep trouble on Ebola for any number of reasons, but these two stand out:

1) AWOL: About 2012, everyone (including his own party and talking heads on MSNBC) was talking about President Obama being absent, AWOL. He was not to be found. Clint Eastwood even did the famous "empty chair" routine. And all the jokes about his golfing. He has been AWOL; he returned too late to deal effectively with ISIS and Ebola. Others filled the vacuum. 

2) GOOFUS: he has lost all credibility. First, he said ISIS was the "JV" and the US military could easily take out ISIS if directed to do so. Second, he said Ebola was difficult to transmit.

Whether one is an Obama supporter or not, it's hard to argue these two points if one is intellectually honest.

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

Distancing Himself

Getting ready for a presidential run in 2018, it looks like Mr Biden is starting to distance himself from this administration. I wonder if he can "resign" like Mr Holder?

The Weekly Standard is reporting:

"The middle class is getting killed," Biden said.

"In the last ten years, average salary of the middle class in America according to Standard & Poor's has gone up 14 cents."  (President Obama and VP Joe have been in office for 60% of that time.)

Biden's event was "on the Importance of Investing in our Nation's Infrastructure," according to the White House.

Infrastructure like the Keystone XL pipeline?

From Lynn Helms/NDIC Regarding Slump In Oil Price And Other Musings-- October 16, 2014

Updates

October 17, 2014: the NY Times on the slump in oil prices.  My feelings, exactly, in general. 

Original Post

In a long post, there are typographical and factual errors. This is mostly an opinion page. If any of this is important to you, go to the source. This is not an investment site: do not make any investment, financial, or relationship decisions based on anything you read here or think you may have read here. 

Link here.

How crude prices will impact the Bakken was the main topic of discussion in this month’s Director’s Cut.

Lynn Helms, director of North Dakota’s Department of Mineral Resources Oil and Gas Division, gave his monthly director’s cut assessment of the Bakken and Three Forks formation, emphasizing the impact crude prices could have on the Bakken.

There are many facets that need to be considered when we look for such an answer, Helms said.

Brent crude prices have been dropping all summer, reaching a two-year low this week at roughly $84 per barrel. West Texas Intermediate, which trades lower than Brent, is closest in price to Bakken crude.

During the webinar, Helms noted that North Dakota sweet crude was being sold for less than $70 per barrel to the Flint Hills Resources Refinery in Minnesota.

To the question of when oil prices will rise, he seemed to answer honestly “We don’t really know where the oil prices are heading.”

With the decrease in crude prices, Helms said that a reduction in the state’s rig count at a pace of roughly 10 percent could be in the future. There are three counties—Bowman, Slope and parts of Divide—that aren’t economic with current oil prices, he said.

“The drop in prices puts eight to ten rigs in those counties at risk,” said Helms. Helms mentioned that Saudi Arabia needs $92 per barrel to satisfy their government needs, which in turn puts them under a lot of pressure as well to change their oil production plans.

“We’re in this together,” said Helms. “Not only is North Dakota under a lot of pressure, but so are all of the Organization of the Petroleum Exporting Countries. But, we are watching it [crude prices] and there are serious concerns out there regarding it.”

********************************* 

My Thoughts

My initial thoughts, "not ready for prime time" were posted October 14, 2014, and have not been updated.

A reader sent me a fairly long commentary from a newsletter author who was very, very bullish on the Bakken (the author had an agenda, to sell newsletters, so the commentary has to be read with some circumspection).  I assume the commentary is meant only for subscribers so I won't post it (now) but this was my reply:

The most interesting thing: the cost of completing a well on a per bbl basis (break-even cost) was said to be ___.

That goes along with the ___ (or whatever it was the Reuters said) that was said to be the break-even cost in McKenzie County.

Several months ago I got an e-mail from someone "connected in the Watford City area who said the break-even cost in Watford City area is _____. He said I should not post that.

For a brief moment I posted the link to the Retuers article and _____ (per Lynn Helms) in McKenzie County (more accurately Watford City area), but I pulled it down once I got push-back from folks who appeared to be misinterpreting what I was trying to say. I did not want to muddy a very complicated issue.

This (the slump in the price of oil) could get very, very nasty before it's all over.

My optimism may be very, very misplaced.

But there's a lot of other stuff that the writer did not say (in the commentary you sent me) that furthers the optimist's argument and my own optimism.

I'm looking for two years of angst.

Folks with long horizons and ability to stomach this could do quite well.

In the near term: Alaska is not coming back; California is not coming back. Deep-sea drilling could be in deep trouble (no pun intended); certainly off-shore US is not going to expand under current administration with this glut of oil. The Wyoming, Louisiana, and Oklahoma shale plays pale in comparison with the Bakken, Permian, and Eagle Ford. Canadian oil sands have greater challenges than US shale. There will be no other "elephant oil fields" discovered in the US North America (the map at the new dinosaur wing at the Los Angeles Science Museum pretty much proves that).

No one talks about legacy conventional field in North America.

At the end of the day, it seems we are left with the Bakken, Permian, and Eagle Ford.

But I'm always an optimist and I could be badly wrong.

Much more could be written.

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

The Jobs Report

Now, somewhat related: the jobs report. Again, an e-mail to a friend:

First time unemployment claims (October 16, 2014, report): 14-year-low.

At some point, there has to be some point at which we reach "steady state."

That is, at a certain point, I would assume there will always be "unemployment claims" even at full employment. In addition, the number of applications provided each week is a raw number, not percentage of Americans, or percentage of total able-bodied that could be in the work force, or percentage of actual work force ... etc.

In other words, this has be an extremely good report (they said no state sent in estimates) and the period included nothing unusual.

Investors may be anticipating a global slowdown, certainly a recession in Europe, but with a glut of oil in the US (gasoline solidly below $3.00/gallon is now likely) and 14-year low in first time unemployment claims, one starts to wonder if we might be seeing a divergence -- a huge divergence -- developing between Europe and the US.

If the US accelerates (and, yes, I saw Wal-Mart's projections yesterday) and the EU continues to lag (which is pretty likely), the gap between the US and Europe will widen. It's hard to believe, that if this is accurate, that the North American energy revolution was not responsible for all of this. Energy keeps getting less expensive here and it keeps getting more expensive elsewhere.

The winners: China and the US.

China is buying cheap oil as fast as they can and storing it in tankers off-shore.

*********************************  
Additional Thoughts

I still maintain that the Bakken is uniquely positioned for crude oil requirements in the northeast US and for California.

The RBN Energy post today reminds us that Saudi Arabia oil imports into the US will never go to zero.  

Apple Presentation Live -- October 16, 2014

Apple live presentation is now over; it will be available (and may already be available) at www.apple.com.

Today's presentation worked very, very smoothly.
Quick updates started with Apple Pay and Apple Watch.

Apple Pay.

Essentially every bank in the US (all the major banks + 500 regional banks signed up since last Apple presentation). 

Begins Monday, October 20, 2014.

Apple Watch.

Will ship in early 2015.

Now the new stuff.

The entire spectrum of products.

IOS 8 and IOS Yosemite.

IOS 8:

• mobile
• 48% installed base in 26 days; 46% installed IO7 (2013) = 94% with versions since 2013
• Android: 54%, 2012 release; KitKat, newest version, after almost one year: 25% 
• Android users not updating their operating systems
• Apple users update the operating systems at a much faster rate
• continuity between iPhone and iPad is absolutely incredible: one can be on the iphone web, and then set it down, pick up the iPad and start where you left off; it is truly incredible.

It's actually a very, very good presentation.

The iPad.
the iPad is everywhere: work, school, play
more iPads sold in the first 4 years than any other Apple product

• retinal iPad customer satisfaction: 100%; unprecedented
• 675,000 iPad apps
• "the iPad Air: the best table you can buy"
• #1 in usage, in enterprise, in consumer, in education
• iPad Air 2: thinnest ever made; 18% thinner; world's thinnest tablet
• two of them stacked are thinner than the original iPad
• no air gap; thinner, but also better graphics
• anti-reflective coating; never been done in a table before; reduces reflections by 56%; lowest reflectivity in any tablet 
• whole new generation chip; specifically for iPad Air 2, A8X, 3 billion transistors; 40% faster CPU, 2.5x faster GPU (180 x faster than original iPad); incomprehensible
• 10-hour battery life
•  tracks motion, calibrates sensors, barometer (measure relative elevation -- as in climbing stairs)
•  best viewfinder for taking photos, movies
• scan and translate documents on the fly (think about world travelers)
• full new 8MP iSight camera
• 1080p HD vidieo
• great depth of field; skin tones perfect; background painterly
• large panoramics photos with 43 megapixels
• burst mode
• timelapse -- it really is a great presentation; this may be the most watched video in quite some time
• slo-mo video
• dual microphones, better sound quality
• new FaceTime HD camera on the front side
• burst selfies which kids love to do
• faster wi-fi; 2.8x faster
• touch ID --#1 request by users
• $499 for 16GB, least expensive version; more storage iPadmini 3's will be less expensive that previous editions by $100/unit
• two versions: iPadAir 2 and iPadmine 3
• original iPad mini will be continued to be sold at $299; lowest price point ever for iPadmini;
• ready to ship end of next week
• pre-orders now
• watch for long lines at Apple stores this week
• in time for holidays
• incredible

iMac
best lineup ever
30th birthday this month

Year-over-year growth for Apple desktop Mac vs rest of industry.  Mac with an 18% yoy growth rate; rest of industry: negative. One simply sees Apple everywhere on television and in the movies.

• world's highest resolution display
• retina 5K display
• just last year all the talk was about 4K
• 7x the number of pixels on your HD television
• 67% more pixels than 4K
• 4K monitor: $3,000 or more
• iMac iwth 5K display: $2,499 -- and that includes a whole computer
• starts to ship today

Mac mini: updated

• previously started at $599
• starts at $499
• most energy-efficient Apple desktop computer

Jobless Claims Plunge; 14-Year Low -- October 16, 2014

Link here.

Applications for unemployment benefits in the U.S. unexpectedly dropped last week to their lowest level in 14 years as employers avoided trimming staff even as global growth weakens.

Jobless claims decreased by 23,000 to 264,000 in the week ended Oct. 11, the fewest since April 2000 and lower than any projection in the Bloomberg survey of economists. There was nothing unusual in the data and no states were estimated, a spokesman said as the figures were released.

Companies are beefing up staff as payrolls this year remain on track for their biggest gain since 1999.

Forecasts:

The median forecast of 49 economists surveyed by Bloomberg projected the number of claims would increase to 290,000 last week. Estimates ranged from 280,000 to 300,000. The prior week’s reading was unrevised at 287,000.

Moving average:

The four-week average of claims, a less-volatile measure than the weekly figure, declined to 283,500, the lowest since June 2000, from 287,750 in the prior week.  

This is an incredible report. I will provide commentary later.

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

Initial Unemployment Claims

Historical Data -- Graphed

Go to this link: http://www.tradingeconomics.com/united-states/jobless-claims.
When you get to the link, look at two graphs.

First look at the 2013 to 2014 graph.

Then look at the 1995 to 2014 graph (it only goes back as far as 1995).

Two points: first -- I noted earlier that at some point, one must reach a "baseline" -- a point at which initial claims will not drop much further. That seems to be borne out by the graph from 1995 to 2014.

The second point: I believe long-term unemployment benefits ended in late 2013, and were not renewed, despite much call for renewing extended benefits, in early 2014. Look at the 2013 to 2014 graph: first time claims peaked at the end of December, 2013, but then has been on a striking downward trajectory since then (with only one strange blip in May, 2014, time frame).

It may be simply coincidental that initial claims have plunged ever since long-term benefits ended.

Part I of a 2-part comment.

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

A Note To The Granddaughters ...

... and to those who call me.

Wow, what a liberating feeling. No phone!

I have an old Samsung, at least four years old, the clamshell / flip style. The original battery was starting to hold a charge less and less, barely lasting a long telephone call. I went to a local Interstate Battery Store the other day, and had a new Samsung battery inserted.

It worked, of course, but for some odd reason it would not charge. And the phone eventually died. Like last night.

I had several options:

• return to the store to try a new battery;
• return to the store for an external battery recharger;
• to Sprint store for a new phone.

I will do almost anything to avoid getting a new phone. I would get the very same phone, and the cost would be nominal ($50?), and would have the same phone number, etc., but they always seem to mess up the billing for the first month or two. At least that's been my experience.

I doubt Sprint is any different than ATT or Verizon in that regard.

I love Sprint and won't change. 

The folks at Interstate Battery are incredible; very, very easy to deal with. I assumed.... and instead they will order the EXACT Samsung battery that was designed for this phone and see if that works. Their concern: what will I do without a phone for one week until the battery gets in?

Are you kidding? No phone for a week! Liberated. I told the individual that the only reason I need a phone is to all my bank periodically when I mess up my password and get locked out of my account.

Occasionally I need a phone to call my daughter when I get lost or forget where I'm supposed to be taking our younger granddaughter to soccer (the fields change frequently) or the older granddaughter to swimming (the venues change with each swimming meet).

But that's about it.

Liberated. For a week.

And if the new battery for some reason doesn't recharge inside the phone (which would make no sense), I will simply but an external recharger and recharge the battery every few days.

I just hope I don't have to visit the telephone store to get a "new" clamshell / flip phone.

[Update: I got the "new" battery yesterday, October 27, 2014, and I now have my 20th century clamshell back. I guess I'm glad to have a phone again, but I have to say, I did not miss it all that much. However, I was able to call The Wall Street Journal folks to let them know that the daily newspaper is not being delivered ever since the manager of the apartment complex changed the security code on the gate to the apartment complex. If it's not one thing, it's another.]

Natural Gas Fill Rate Below The Magic Number Of 100 -- October 16, 2014

The magic number is 100.

More is better if one is worried about preparation for the winter.

The number today: 94. At the link, scroll down to see the graph.

See "NG_Fill_Rate" at bottom of blog for past posts on this subject.

This link probably explains the most.

By the way, it's hard to see, but looking at the graph at the link to the EIA page (the first link above) the gap is widening from historical fill rate. At least that's what I see. 

Thursday -- October 16, 2014

Active rigs:

	10/16/2014	10/16/2013	10/16/2012	10/16/2011	10/16/2010
Active Rigs	190	184	187	195	153

RBN Energy: excellent article on why Saudi Arabian oil imports into the US will "never" go away. This is another great article, highly recommended.

Crude oil prices are in free fall – the prompt U.S. benchmark WTI CME NYMEX futures contract was down 24 percent to $81.78/Bbl yesterday (October 15, 2014) from its recent high in June. International benchmark IPE Brent futures were down 27 % over the same period to $83.78/Bbl.

Most analysts point to an excess of crude supply over faltering demand as the main driver behind the price collapse. The apparent willingness of OPEC leader Saudi Arabia to protect its market share at the expense of higher prices is also a bearish factor. Today we explain why Saudi Arabia is bucking the trend that has pushed out other light crude imports with a robust and unwavering flow of 330 Mb/d of Arab Light.

Rampant increases in U.S. domestic production of light sweet crude oil over the past three years have all but pushed out imports of similar grades from the Gulf Coast. The first imports replaced were light sweet crudes from West Africa and the North Sea.

And the next import casualties are expected to be light sour crude grades that could perhaps be most easily displaced by domestic shale barrels.

Of the five top Gulf Coast light sour crude importers in 2010, only three remain active: Saudi Arabia, Mexico, and Iraq. The light sour crudes from these regions in 2014 averaged 466 Mb/d composed of 74% Arab Light, 9% Isthmus (Mexico), 7% Olmeca (Mexico), and 6% Basrah Light (Iraq). These light sour imports have not been displaced by domestic production at the same pace as their light sweet counterparts.

Light sour imports to the Gulf Coast from these three countries accelerated from 2009 to 2012, when they peaked at an average of 836 Mb/d. A gradual decline subsequently set in, with the displacement averaging 185 Mb/d per year in 2013 and 2014. If the current trend continues, light sour imports would disappear by the second quarter of 2017.

However, two factors in particular may prevent some of these light sour imports from going to zero in the foreseeable future: joint ventures/contractual commitments; and crude quality requirements.

That's the introduction but the linked article provides the details. Most of these articles disappear over time, requiring a subscription to access past articles.

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

Where Is The US Surgeon General?

It's a long, long story, but the US currently has no "permanent" US Surgeon General. We, do, however have an "acting" US Surgeon General but to the best of my knowledge the "acting" surgeon general has been little involved in the Ebola issue, at least publicly.

The Senate, controlled by the President Obama's party, has failed to confirm President Obama's US Surgeon General nominee because of the latter's stance on gun control.

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

Obama/Ebola

Katrina / Fall of Saigon / 9-11 / Bay of Pigs / Cuban Missile Crisis  -- All Rolled Into One?

There was one difference: in each of the former "disasters" we had a leader in Washington. One can argue whether the second Bush lacked intellectual curiosity or missed the initial events, but he did not check out; he was never accused of being AWOL; he might have been inept in some folks' eyes, but I don't recall anyone saying he was AWOL. He may have made huge mistakes political and otherwise, but he never checked out.

Starting about October, 2012, there was talk that President Obama had checked out. He was bored with the presidency and frustrated with gridlock. He himself has said he was lazy.

Fall of Saigon: missteps, but I don't recall hearing anyone suggesting that LBJ was AWOL. Maybe a lot of other things, but not AWOL.

Bay of Pigs? The president was definitely not AWOL. He was in the middle of it.

It's interesting that folks started noticing in October, 2012, that the president seemed to be detached. There are reports that sometime in 2012 military intelligence was bringing him reports of ISIS. There are reports, pretty much confirmed, that the White House ignored those reports. Remember, they were bringing him the reports (there is no record that he read them) because it is well known that he started skipping intelligence briefings about that time.It is confirmed that the president considered ISIS the "JV" team -- that Al-Qaeda was varsity.

Ebola is purely a political issue: look at the headline links at the moment:

• NYT: Ebola anxiety grows ...
• Washington Post: Threat of virus might interfere with commerce, daily routines
• OH and TX close some schools
• Dallas may declare state of disaster
• White House ignored CDC's Ebola advice
• The Senate (controlled by President Obama's party) never confirmed the president's nomination for US Surgeon General
• Political hack running the CDC
• Political hack running Health And Human Services (prior job was with OMB)
• Cruz: Congress should be called back for travel ban; President and CDC don't see need for travel ban

That's only my opinion and I assume I'm in the minority.

Today: Webinars On Shale Oil -- October 16, 2014

A reader sent this in as a comment: links to some webinars that might be of interest to those following the Bakken. I haven't looked at these websites very closely but it looks like some (all) of the webinars are free but pre-registration is required.

http://extension.psu.edu/natural-resources/natural-gas/events

By the way, highly recommend many of the saved webinars:

http://extension.psu.edu/natural-resources/natural-gas/webinars

(check out June 2014 Utica and SEP2013 Marcellus talks especially)

"PSU" is Pennsylvania State University. 

Today's webinar is on the Bakken:  The Bakkan Part I: History and Challenges of Oil Development
Vicky Steiner, Executive Director, North Dakota Association of Oil and Gas Producing Counties and Gerry Fisher, North Dakota Energy Infrastructure and Impact
Today: October 16, 2014, 1:00 PM - 2:00 PM

Pre-registration required.