Wednesday, November 26, 2014

Weather Alert -- North Dakota -- November 26, 2014

Crystal, North Dakota, Radio Station

Second Autumn Event, 2014
Global Warming
Albany, NY, breaks 1888 snowfall record with 6'7" inches falling on Wednesday - Only Approximately 15 people reported protesting in Ferguson, MO, as snow falls on area 
More than 48,000 New York customers without power due to snow storm, utilities company reports 
Northeast: 730 flights canceled; 4,300 delayed 
Approximately 300,000 customers reported without power in New England due to snow storm, utilities companies say

Fusion's Flurry Of Fury -- Schumer, ObamaCare -- November 26, 2014

Flurry of Fury Over ObamaCare

I do not yet know the context, but this is quite incredible. There is one big "message" here.

I'll come back to it later. [Update: initial thoughts here.]

Senator Schumer Admits ObamaCare Was a Mistake

Fusion reports: flurry of intraparty fury after Schumer's remarks.

Wednesday Night At The Movies

Woody Allen's Midnight in Paris and then The Great Gatsby. Going to be a great night. 

Wednesday, November 26, 2014

Active rigs:

Active Rigs183193185202163

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

Thirteen (13) new permits --
  • Operators: Oasis (5), Emerald Oil (4), XTO (4)
  • Fields: Missouri Ridge (Williams), Boxcar Butte (McKenzie), Dollar Joe (Williams),
Two (2) producing wells completed:
  • 27538, 1,164, Whiting, Knife River State Federal 13-32TFH, Sanish, t10/14; cum --
  • 27907, n/d, CLR, Vachal 10-27H3,  Alkali Creek, c10/14; no IP;

Natural Gas Fill Rate Falls And It's A Doozy -- November 26, 2014

I was surprised by this. It looks like the natural gas fill rate will be released at 12:00 noon today. This post might have the best background for newbies. The tag at the bottom of the post, "NG_Fill_Rate" will take you to previous posts on this subject in chronological order.

Wow, wow, wow -- today's number (a dynamic link): - 162

The narrative:
This represents a net decline of 162 Bcf from the previous week. Stocks were 346 Bcf less than last year at this time and 400 Bcf below the 5-year average of 3,832 Bcf.
In the East Region, stocks were 183 Bcf below the 5-year average following net withdrawals of 89 Bcf. Stocks in the Producing Region were 166 Bcf below the 5-year average of 1,257 Bcf after a net withdrawal of 55 Bcf. Stocks in the West Region were 52 Bcf below the 5-year average after a net drawdown of 18 Bcf. At 3,432 Bcf, total working gas is below the 5-year historical range.  
Even the producing region saw a net withdrawal. 

Most incredibly, look at the graph at the link, the gap between today's data point and the 5-year historical average has widened.

The "historical decline rate" for the past month (October 14 - November 21) was always pretty flat. This year, that same period, a distinctive downturn. Global warming.

Natural gas is currently up 6 cents, to $4.46, trending higher. The first monthly report for winter is still five weeks away.

The Road To Germany

A reader sent me this link:
State utility regulators today approved a 500-mile transmission line designed to ferry thousands of megawatts of power from wind farms in Iowa and other Plains states into the Chicago market.
The unanimous endorsement by the Illinois Commerce Commission, over the opposition of Commonwealth Edison, was a major regulatory hurdle for the developers of the $2 billion Rock Island Clean Line.
I've become "agnostic" with regard to wind, but the fact that Commonwealth Edison opposed this suggests the utility is concerned about the "road to Germany" in which utilities are at great risk with the business model being proposed by the Illinois Commerce Commission, but it's their call, and the "road to Germany" is well-known.

Some Parting Thoughts

Remember: This is not an investment site. Do not make any investment, financial, or relationship decisions based on what you read here or what you think you may have read here. Make no travel plans based on what you read here. I post quickly and frequently; typographical and factual errors are likely. If this information is important to you, go to the source.

Some data points and stories that pretty much tell  us some exciting things about the energy picture in North America. 
  • the RBN Energy story posted earlier today about how huge the Canadian oil sands really is
  • the CNBC video from yesterday telling us how much energy India and China will need through 2035
  • that same CNBC video that suggests the Bakken is "bigger" than the Arctic (the Arctic matters not for the moment; Nero has written off the Arctic, pretty much giving the Arctic to Russia, Denmark, Canada, and a few others)
  • the record high UNP recorded yesterday; its dividend history; and its forecast
  • how inexpensive gasoline is today, and how incredible the supplies of oil will be for the rest of my life, and possibly for the rest of my daughters' lives; the Peak Oil graph will move to the right for another 30 years
  • the incredible opportunities young investors have today compared to when Warren Buffett was starting out
  • LNG exports begin in earnest next year
  • crude oil pipelines are full; imagine how much more is needed (based on all the CBR that needs to be turned into pipeline)

Random Update On Scanlan And Pankowski -- November 26, 2014

The graphics:

 The wells:
  • 33404, 2,053, Whiting, Thomas 43-4H, Truax, t1/18; cum 203K 7/19;
  • 33405, 1,229, Whiting, Thomas 43-4TFH, Truax, t1/18; cum 171K 7/19;
  • 33406, 2,502, Whiting, Thomas 43-2H, Truax, t1/18; cum 162K 7/19;
  • 33407, 1,633, Whiting, Thomas 43-2TFH, Truax, t1/18; cum 199K 7/19;

  • 33409, 1,102, Whiting, Scanlan 42-9TFH, Truax, t12/17; cum 176K 7/19;
  • 33410, 1,947, Whiting, Scanlan 42-9-2TFH, Truax, t12/17; cum 176K 7/19;
  • 33411, 1,980, Whiting, Scanlan 42-9-3TFH, Truax, t12/17; cum 139K 7/19;

  • 25602, 2,631, Whiting, P Scanlan 153-98-16-9-5-5H, Truax, t3/14; cum 323K 7/19;
  • 25601, 1,461, Whiting, P Scanlan 153-98-16-9-11-16H3, Truax, t4/14; cum 97K 7/19;
  • 25600, 2,665, Whiting, P Scanlan 153-98-16-9-5-12H, Truax, t3/14; cum 308K 7/19;
  • 27122, 2,372, Whiting, P Scanlan 153-98-16-9-11-16H, Truax, t4/14; cum 242K 7/19;

  • 18770, 819, Whiting, Scanlan 3-5H, Truax, t9/10; cum 367K 7/19;

  • 33294, 1,600, Whiting, Scanlan 11-5-2TFH, Truax, t1/18; cum 165K 7/19;
  • 33295, 1,595, Whiting, Scanlan 11-5TFH, Truax, t1/18; cum 229K 7/19;
  • 33296, 2.095, Whiting, Scanlan 11-5-2H, Truax, t12/17; cum 194K 7/19;
  • 33297, 1,591, Whiting, Scanlan 11-5H, Truax, t12/17; cum 243K 7/19;

  • 20856, 1,349, Whiting, King 3-8H, Truax, t1/12; cum 354K 7/19; see full production data here;
  • 33455, 2,454, Whiting, King 11-8H, Truax, t12/17; cum 207K 7/19;
  • 33456, 1,252, Whiting, King 11-8-2H, Truax, t12/17; cum 195K 7/19;
  • 33457, 1,525, Whiting, King 11-8TFHU, Truax, t12/17; cum 190K 7/19;

  • 28717, 3,638, Whiting, P Johnson153-98-1-6-7-16HA, Truax, t8/15; cum 465K 7/19;
  • 28715, 3,899, Whiting, P Johnson153-98-1-6-7-16H, Truax, t9/15; cum 428K 7/19;

  • 31086, 2,249, Whiting, P Pankowski 153-98-4-6-7-13H, Truax, t9/15; cum 369K 7/19;
  • 31087, 2,399, Whiting, P Pankowski 153-98-4-6-7-13H3, Truax, t9/15; cum 205K 7/19;
  • 31088, 2,248, Whiting, P Pankowski 153-98-4-6-7-13HA, Truax, t9/15; cum 3145K 7/19;
  • 31089, 2,374, Whiting, P Pankowski 153-98-4-6-7-14H3, Truax, t10/15; cum 244K 7/19;

  • 20857, 358, Whiting, Pankowski 4-6H, t2/12; cum 259K 7/19; with periodic small jumps in production, month-over-month;

Original Post

NOTE: starting with cumulative totals in October, 2014, an asterisk should be placed, stating that producers could be choking back production starting in October, 2014, in the Bakken for any number of reasons:
  • backlog in rail (BNSF said they were going to cut back on takeaway to make room for grain)
  • global slump in oil prices
  • tsunami of oil arriving at destinations
  • North Dakota flaring rules go into effect 
18770, 819, Whiting/KOG, Scanlan 3-5H, Truax, t9/10; cum 285K 12/17; updated here;

20857, 358, Whiting/KOG, Pankowsi 4-6H, Truax, t2/12; cum 240K 112/17;

25599, dry, Whiting/KOG, P Scanlan 153-98-16-9-11-16H, c11/13; cement casing failure on surface spud;
25600, 2,665, Whiting/KOG, P Scanland 153-98-16-9-5-12H, t3/14; cum 238K 112/17;
25601, 1,461, Whiting/KOG, P Scanlan 153-98-16-9-11-16H3, t4/14; cum 83K 112/17;
25602, 2,631, Whiting/KOG, P Scanland 153-98-16-9-5-5H, t3/14; cum 281K 112/17;

This is what this area currently looks like:

One can tell from the map, that there is a lot more room for a lot more Scanlan wells.

I "wish" NDIC would make a distinction between "truly dry wildcats" and wells that were not completed due to operational issues, not that the well was "truly dry."

A Note For The Granddaughters

I remember when I was the manager for our high school football team. I was responsible for tracking rushing and passing statistics (among a whole of other things). I was never told how to do things, "just do it." (Nike.) So, when it came to passing, I tracked the yardage of the pass itself, and then the yardage gained after the pass. My coach thought I was nuts. He just wanted the "passing yardage," and he didn't want it broken down into two elements. I see now, the NFL and the television broadcasters break it down the same way.

RBN Energy Tells Us How Huge The Canadian Oil Sands Really Is, A Must Read -- November 26, 204

Active Rigs:

Active Rigs184193185202163

RBN Energy: the diluent transportation story in Canada; building enough pipeline to reach 1 million bopd by 2017, more than enough through 2030; part 6 in the series.

Some data points from the article:
  • Total Canadian demand for diluent in 2014 is expected to average 380 Mb/d – meaning that with 160 Mb/d of local supply about 220 Mb/d will be imported – mostly from the U.S. By 2019 total Canadian diluent demand is expected to increase to 685 Mb/d and some of that will be supplied by imports from the U.S.
  • TransCanada is a major pipeline system owner and operator in North America with extensive storage and outbound pipelines in Hardisty and an expanding presence in Edmonton. The company is currently constructing the TC Terminal in the Heartland region of Fort Saskatchewan, north of Edmonton together with the125 mile, 900 Mb/d capacity Heartland pipeline to Hardisty. Both these projects are planned to be in service during 2H 2015. 
  • TransCanada has also just received regulatory approval (in October 2014) to begin construction of the 300 mile Grand Rapids pipeline from the Heartland terminal to Fort McKay, northwest of Fort McMurray in the oil sands production region. Grand Rapids will carry up to 900 Mb/d of blended bitumen and diluent from Fort McMurray to Edmonton and up to 330 Mb/d of diluent in the opposite direction. The pipeline is planned to come online in stages starting in mid-2016 with completion expected in 2017 and includes approximately 1 MMBbl of storage capacity.
  • TransCanada is partnering with Phoenix Energy Holdings Limited to develop the $3-billion Grand Rapids Pipeline that will be a 50/50 joint venture between the companies. Phoenix is a wholly owned subsidiary of PetroChina that owns the Dover and Mackay oil sands fields that the pipeline will initially serve. Bitumen production from Dover and McKay is expected to ultimately reach 520 Mb/d.  
Much, much more at the linked article including great graphics as usual.

Update On Devils Lake Refinery Proposal

It is being reported at The Dickinson Press.  I'm not aware of anything new that hasn't beer reported earlier:
Data points:
  • officials from Eagles Ledge Energy, based in Vancouver, B.C
  • $200 million, 20,000-barrel-a-day clean fuels oil refinery
  • could be built near Devils Lake
  • American Dakota Refinery could be open by 2017
  • would process oil from the Bakken Oil Patch of western North Dakota into low-sulfur diesel fuel, which would be converted to off-road diesel fue
  • similar to the one in Dickinson 
Ferguson, Final Observations

As mentioned yesterday, I stayed up all night Monday/Tuesday listening to radio reports on Ferguson. These were the things the stood out for me:
  • I was most disillusioned when the stepfather said, "burn this bitch down." (Rodney King: "Can't we all just get along?")
  • the side-by-side video of America burning; Nero asking for calm
  • although the burning was bad for business owners in Ferguson, it was nowhere near as bad as I thought it was going to be; it sounds like it was limited to a small area
  • I was amazed that some Ferguson business owners did not think there would be any violence or looting (what were they smoking?)
  • on-scene reporters noted police tactics: let the agitators burn a few "gimmes" -- a few police cars (probably those with lots of mileage were left unattended); but nothing really important burned; no federal buildings (post office, court houses, etc., burned (hardly occupied); that would have been REALLY SERIOUS; someone might have gotten arrested
  • I was the only one who thought making the announcement after dark was brilliant (whether planned or not)
  • I learned a lot about the reporters on the scene (dishonest reporting; hidden agendas; naive; uneducated)
  • it certainly seemed the press was hoping for more
  • based on early events, this story has no legs at the national level (though Rev Al will milk it for all it's worth); but it will be the beginning of the end for Ferguson as an urban area where people want to live
  • by the end of the week, outside agitators will be moving on
  • most impressive: the military/law enforcement held their fire -- no injuries or deaths due to gunfire (by LE/NG)
  • the mayor was upset the National Guard did not arrive earlier; the National Guard did it just right; I think the response by all LE/NG was brilliant, considering
  • no reports of any police harassment; no FBI stories of note
  • I don't recall any Eric Holder public announcements Tuesday morning or even anything from Nero
And then this: along with Martin Luther King, I am judging the agitators in Ferguson on the basis of their character (actions), and not on their skin color
Putting things into perspective. This from CBS-StLouis-Local :
Barnes-Jewish Hospital in St. Louis says it admitted two injured people and treated and released five others. It didn’t disclose the nature of the injuries.
Years ago, in another life, I worked in the emergency room of Los Angeles County hospital during the height of the gang wars. My surgical rotation had emergency room call every Saturday, 8:00 a.m. through Sunday morning, 8:00 a.m., and we stayed with our patients until Sunday evening, 5:00 p.m. when we were finally relieved after 33 hours of being in a virtual war zone from a casualty perspective. When I think back on that now, it really was incredible how good the nurses and technicians were at triaging and performing life-saving procedures, freeing the surgeons up for cases in the operating room. I never recall an administrator or a "clip-board nurse" getting in our way. It's amazing how much one can do with a) intubation and artificial respiration; b) stopping bleeding with relatively simple procedures; c) infusing liters of clear fluids.

The surgeons "fought" for this shift -- the busiest surgical night of the week. When casualties from gang fights started rolling in, our first question to the combatants was, "how many more are coming in?" We needed that data to start triaging.

Saturday nights were so busy with gang wars that folks presenting with non-traumatic medical / surgical emergencies were stabilized, often with huge doses of antibiotics and placed in holding areas (usually hallways) waiting to be admitted or taken to the operating room the next day.

So when I see "two were admitted" and five were released in that story above it really puts things into perspective. I doubt more than four or five LA police cruisers responded to any given gang war, and yet, here in Ferguson, thousands of law enforcement and national guard, and no "police state" killings reported in the early going. Pretty impressive.

Unfortunately, it seemed the press and a few others were hoping for more.

Unemployment Claims (First Time Claims) Surge -- November 26, 2014; First Time Since September That Claims Broke The 300,000 Threshold; Four-Week Average Also Rises -- AP


Later, 10:02 a.m. CT: I find this interesting. I truly thought the 313,000 number was quite incredible (especially considering all the data points below, and the miss by analysts by 26,000 -- that's a huge, huge miss). But yet, Reuters/Bloomberg were so sanguine (is that the right word?). I was wondering. But then I saw this: Matt Drudge was also surprised; he put the link in red with the headling saying that the number was above 300,000. Whew! I feel better that I wasn't misreading the story.
Original Post

Reuters: their report.
Bloomberg: their report.

First time jobless claims surge by 21,000.  Last week's report was revised upward by 1,000 to 292,000.

Yes, Virginia, this report is horrendous. Let me count the ways.

First, back on November 13, 2014, just a couple of weeks ago, when the increase was big, but not as big as this past week, Reuters called it simply a "pause" (applications surge 12,000 to 290,000). We'll look at the Reuters spin for this week's data later. (Spoiler alert: Reuters did not say this was a "pause." They just said everything was, and I'm paraphrasing here, "okey-dokey."

Second, Reuters says there was nothing "special" to explain this surge. That's scary, when a surge like this cannot be explained away.

Third, analysts had actually expected the number to drop to 288,000 from 293,000 (a drop of 5,000). So instead of dropping 5,000, the number rose 21,000, or 26,000 worse than expected. Back on May 22, 2014, the number surged 28,000; that's how far back I had to go to find a comparable surge.

Fourth, this is just before the holidays (but not yet the holiday season). Not only is this an emotional hit that unemployment claims are surging just before the holidays, but it's not good news for a number of reason.

Fifth, this is just before the holidays (but not yet the holiday season)when retailers have been scrambling to hire folks for seasonal jobs. One can only imagine the number had retailers been laying off folks.

Sixth, this is just after President Obama invited up to 5 million more undocumented workers to stay in the US "permanently." Well, for at least three years with no threat of deportation. And, yes, they will collect benefits, at least according to a headline I surfed through (without reading the story; I can only take so much depressing news in any given day).

Now, back to the spin.

  • the four-week average dropped again, for the 11th straight week, a sign that the jobs market was improving. In fact, the average continued to drop due to the anomalous fall in applications on October 16, 2014, which was never explained, and didn't fit the expectations
  • the number of people still receiving benefits fell to 2.32 million, the lowest since December, 2000. What Reuters never mentions: the 99-week extended benefits ended late last year. Of course, the continuing benefits number should decrease from this simple fact alone; if it increases, watch out.
  • the numbers suggest the next monthly unemployment report could show a six-year low of 5.8%
  • to their credit, they got the headline correct -- claims increase to almost a three-month high
  • to their credit, in the first paragraph: "a possible sign the pace of improvement in the labor market has cooled"
  • fair and balanced? "It would take several weeks of sustained elevated readings to confirm the labor market has taken a step back." 
  • one analyst says it's hard to forecast the claims number during the holiday season (which, of course, has not yet happened) but Bloomberg did not say how badly the forecast was -- the analysts expected a decrease of 5,000; when in fact, the huge surge
For the record, the four-week average: not said in either article; Reuters simply mentioned it was below 300,000. 
 Other economic data was released in the same report. Consumer spending kept pace with income (which isn't saying much). This was key: the stock market, which had been in the green, went negative after the report.

Later, 9:51 a.m. CT, November 26, 2014: I found this most recent surge so interesting that when I saw the AP headline, I decided to see how the AP handled it:
  • the highest level since the first week of September 
  • the four-week average, a less volatile measure, rose 6,250 to 294,000
How interesting. I was led to believe by Reuters/Bloomberg that the four-week average actually decreased; either I misread their articles (they were not explicit about the number) or I was misled (which happens a lot; I don't spend a lot of time on any of these things). 

I was actually surprised when I thought Reuters/Bloomberg said the four-week average actually decreased. I thought that was highly unlikely due to last week's surge. I did not correct the original blog above, just left it as written. I did add this to the subject line.

A Reminder: URL For The Blog

If you click on some very old links, you may end up with an alert suggesting that page is missing or does not exist or something to that effect.

As far as I know, none of the links to past "" posts are missing.

If you get the alert, make sure the first part of the URL is:

Note the very important "the" in front of "milliondollarway."