Tuesday, March 31, 2015

Idle Rambling On A Tuesday Night -- March 31, 2015

No matter where I lived I would brag about it. No matter where I lived, whether I loved it, hated it, or somewhere in between, I would brag about it and tell others it was just awesome, and the best place I've ever lived. So when I write that where I'm living now is absolutely incredible, take it for what it's worth.

Serving 30+ years with the US Air Force, I've lived in some pretty awful spots, I suppose, but wow, looking book, I don't recall one bad assignment. Rhein-Main Air Base, Germany, might have been the least rewarding -- we were there only ten months -- hardly long enough to do much -- but then again, wow, we did a lot even there, now that I think about it.

Now we are on the northwest side of the DFW airport -- I was thinking about that earlier today -- it seems I've lived on or near runways my entire adult life. It's somewhat ironic that we ended up at the end of another pair of runways. While watching our middle granddaughter at soccer practice, I can watch the planes coming in at the end of day -- and it gets very, very busy between 5:00 p.m. and 8:00 p.m.

I've done a lot of cross-country driving in the last five years. I've mentioned this before. The areas with the most construction in the US, it seems, are in the Bakken, and in Texas (especially on the northwest-north-northeast arc around the north end of the DFW airport); it's absolutely incredible. It is hard to imagine that there are could be any other spot in the US where there is so much land devoted to distribution centers around an airport. Certainly the Frankfurt airport in Germany would have a comparable (probably more) distribution centers, but they would be hidden among other built-up areas. But here on the flat prairie around Texas, they spread everywhere, literally as far as the eyes can see.

One would have thought most of the development would have ended years ago when the airport was first built, but all indications are that the metroplex -- at least the north side continues to grow beyond expectations. Toyota recently moved their US operations from California to Plano, Texas, just north of the airport.

While strolling our youngest granddaughter today -- on my usual daily 3-mile walk with her while my wife is in California -- I filmed a typical outdoor mall that was springing up in our neighborhood. I think they broke ground on this project less than three months ago. This is not atypical; these outdoor malls are popping up everywhere on the north side of the metroplex. I'm having dinner five miles away from this particular site this evening and a similar mall is almost complete just across the street.

Mall Construction, Euliss, Texas

The energy in this area seems so much different than what we saw in the Boston area where our granddaughters spent the last four years. I don't recall much construction up there at all. I remember, on the other hand, reading all the articles about self-interest groups trying to stop more building.

I was reminded of all this when a reader sent me the link to this article: The Northeast, despite highest gas costs, resists more pipelines. The Concord Monitor is reporting:
There is near universal agreement that the Northeast has to expand its energy supply to rein in the nation’s highest costs and that cheap, abundant, relatively clean natural gas could be at least a short-term answer.
But heels dig deep when it comes to those thorniest of questions: How and where? Proposals to build or expand natural gas pipelines are met with an upswell of citizen discontent.
At the end of last year, a Massachusetts route selected by Texas-based Kinder Morgan generated so much venom that the company nudged it north into New Hampshire – where the venom is also flowing freely.
During this winter’s town meetings, a centuries-old staple of local governance in New England, people in the nine towns touched by the route voted to oppose the project. That Northeast Direct line is one of about 20 pipeline projects being proposed throughout the Northeast, where savvy environmental and political forces combine with population density to provide a formidable bulwark.
There’s another reason the loudest protests are all coming from the region: They’re where the gas is, waiting just east of the gas-rich Marcellus Shale region. “Everyone seems to know the Northeast has a pipeline capacity problem, but not many seem to be willing to make many concessions to fix that problem,” said Andrew Pusateri, senior utilities analyst for Edward Jones.
And these are folks who pay a lot to stay warm in the winter and keep the lights on in summer. According to the U.S. Energy Information Administration, New Englanders paid $14.52 per thousand cubic feet of gas in 2014, compared with $10.94 for the rest of the nation.
ISO-New England, which operates the region’s power grid, said in its 2015 Regional Electricity Outlook that natural gas availability is “one of the most serious challenges” the region faces as more coal and oil units go offline.
And yet, the "northeast" folks resist these pipelines.

If I were Kinder Morgan I would walk away and have the folks call me when they are ready to do something.

I saw the same thing when we stationed in England. The joke was that the English still lived in the 1950's and were working half-time to catch up. In fact, England seemed to becoming more of a museum-country than anything else.

A lot of Californians are moving to Texas. A lot of folks in the northeast are moving to Texas. If I "had all the money in the world," I would have a home on Cape Cod, probably Provincetown, we enjoyed it that much. I feel badly for the folks that don't have "all the money in the world" who live in that area of the country. The Elizabeth Warrens won't freeze but a lot of other folks will this next winter. 

The Bakken Still Has Legs -- March 31, 2015


April 1, 2015: the more I thought about, the more I thought this might be the most important / most interesting story of the week, the story below about "the Dickinson refinery is not expected to stabilize diesel prices."

So many story lines. First, the "refinery" (more about that later) was completed at all -- the first new refinery in the US in decades. Second, the amount of diesel if produces is a "drop in the bucket" with regard to how much diesel North Dakota farmers use, especially at harvest. Third, it reminds us how vibrant / huge the North Dakota agricultural industry is. Fourth, the MDU-Calumet partnership and how that plays into the national refinery "grid" and CBR.

After the original post below, I received a nice note from Don. The note, heavily edited to fit the story lines follows:
The "Dickinson refinery" is technically a distillery and NOT a refinery. North Dakota state usage of diesel is 53,000 bpd and is expected to grow to 75,000 BPD in 2025. The plant will be referred to as a "topping” plant because it is an early stage refinery that refines only certain petroleum components found in the crude oil. As such, it does not meet the full definition of a refinery that processes all petroleum components found in the crude oil feedstock that comes into the plant.
"It’s called a ‘topping plant’ because, in essence, it strips out the easily refined components, processes them and ships the remaining components off to other refineries for complete processing,” he said. "Topping plant facilities are typically smaller than full-scale refineries and are usually located near the primary market for their key product.” 
What is not refined is put in tank cars and shipped to Superior Wisconsin, where Calumet has a refinery..   remember there is a CBR  unit right next to the MDU plant. 
Original Post
This is almost bizarre.

This AP story was picked up by the Washington Times: Dickinson refinery not expected to stabilize diesel prices.

Give me a break. This is a 20,000 bopd diesel refinery -- hardly a rounding error among US refineries. This was simply a local entrepreneurial story; someone saw a local need and took advantage of it. It took years to get it up and running -- although the fact that it was completed at all is probably the real story.

And this story gets picked up by The Washington Times -- must have been a slow day in DC on the day this was published.

The Washington Times/AP is reporting:
A new oil refinery near Dickinson is expected to begin operations within three months, but officials don’t expect it to stabilize the price of diesel fuel during harvest.
The Dakota Prairie Refinery is expected to produce nearly 300,000 gallons of diesel fuel each day. It will be sold locally, but MDU Resources Group spokesman Rick Matteson [says] that the amount is “a drop in the bucket” compared to the demand.
North Dakota State University Assistant Professor David Ripplinger also says the refinery will have little to no impact on what farmers pay for diesel, though he says it might help ease supply disruptions. 
Wow, even regionally it's a drop in the bucket. So, why didn't they build it 10x bigger? Let's hope this was a trial run -- time to think much bigger.

Again, I'm getting a feeling for just how big the energy picture is in North Dakota, not just the "Bakken," but the energy picture driven by agriculture. 

Isn't This Interesting -- Active Rigs Increase Over 3% -- March 31, 2015; Twelve (12) New Permits; Eighteen (18) Producing Wells Completed; OXY USA With Six (6) OXY USA Wells; BR With Two Big Wells

Active rigs:

Active Rigs99194188206168

Wells coming off the confidential list on April Fool's Day:
  • 21386, 1,905, White Butte Oil Operations, Panzer 2-20MLH, Antelope, TF second bench, 3-well pad, two dual laterals, consisting of two 4,504 - 5,234' long laterals drilled to the south; the first later accessing the TF 2 was completed November 11, 2014; the second lateral penetrated the Middle Bakken was completed November 27, 2014; the second curve was landed at 10,972 feet into the Middle Bakken, after drilling the Three Forks lateral and then coming back and milling a window in the casing of the vertical hole; the initial curve was landed into the deepest of the two targeted intervals; very little background gas (20 - 50 units) were noted in the first half of the first lateral; lack of permeability and porosity suggested that a strong response to hydraulic fracturing will be needed to unlock the TF 2. Despite the low levels of drilling gas, other wells from the area drawing from the Sanish pool have performed admirably. The ideal target zone (Middle Bakken) was defined as a 20-foot interval; background gas much higher at 1,000 to 1,500 units; even averaging 2,500 units during connections. Summary: the Panzer 2-20MLH was the first of 3 wellheads with 6 total lateral objectives to be compled on the panzer pad, with the cmoplete dual-lateral well reaching completion onf November 27, 2014. The TF2 appears to be less promising than the middle Bakken in this area. The spacing unit is 320 acres; this was originally a Slawson permit; this permit has been renewed at least three times; original Slawson permit was dated 9/1/11. See graphic and spacing below.
  • 26769, 526, EOG, Mandaree 134-05H, Squaw Creek, one section, t10/14; cum 49K 1/15;
  • 26779, 1,014, EOG, Mandaree 17-05H, Squaw Creek, one section, t10/14; cum 69K 1/15;
  • 28666, 2,341, QEP, Johnson 4-9-4BH, Grail, t2/15; cum 42K 2/15; 28 days in February;
  • 29231, drl, Statoil, Heen 26-35-4TFH, Todd, no production data,
Two (2) Hess Stanley permits canceled.

Eighteen (18) producing wells completed:
  • 28264, 5, Denbury, CHSU 24-23NH 15, Cedar Hills, a South Red River B well, t8/14; cum 6K 1/15;
  • 28905, 1,441, Oasis, Harbour 5601 42-33 2B, Tyrone, t2/15; cum --
  • 28352, 2,445, BR, CCU Pullman 1-8-7TFH, Corral Creek, t2/15; cum --
  • 29218, 1,643, BR, CCU North Coast 4-8-23TFH, Corral Creek, t3/15; cum --
  • 28551, 1,057, XTO, HM Hove 34X-33C, West Capa, t3/15; cum --
  • 28650, 1,701, XTO, HM HOve 34X-33H, West Capa, 4 sections, t2/15; cum --
  • 29061, 964, Whiting, Barb W. 11-6TFH, Sanish, 1 section, t2/15; cum --
  • 25849, 1,223, Whiting, Elsie Bartleson Federal 14-29TFX, Sanish, ICO, t2/15; cum --
  • 28581, 226, OXY USA, State 4-21-16H-143-96, Fayette, t3/15 cum --
  • 28759, 854, OXY USA, Raphael Stroh 3-13-24H-143-97, Fayette, t2/15; cum 14K 1/15;
  • 28758, 963, OXY USA, Raphael Stroh 4-13-24H-143-97, Fayette, t2/15; cum 15K 1/15;
  • 28757, 633, OXY USA, Kenneth Stroh 4-12-1H-143-97, Cabernet, t2/15; cum 13K 1/15;
  • 28582, 438, OXY USA, Schneider 2-28-33H-143-96, Fayette, t2/15; cum 3K 1/15;
  • 28583, 661, OXY USA, Schneider 3-28-33H-143-96, Fayette, t2/15; cum 4K 1/15;
  • 29124, 633, CLR, Kennedy 3-31H, Dimmick Lake, 4 sections, t3/15; cum --
  • 29123, 605, CLR, Kennedy 4-31H1, Dimmick Lake, 4 sections, t3/15; cum --
  • 29122, 639, CLR, Miles 3-6H, Dimmick Lake, 4 sections, t3/15; cum --
  • 29121, 567, CLR, MIles 4-6H1, Dimmick Lake, 4 sections, t3/15; cum --

Twelve (12) new permits --
Operators: XTO (6), BR (3), Hess (3)
Fields: McGregor, Elidah, Dimmick Lake, Robinson Lake


26769, see above, EOG, Mandaree 134-05H, Squaw Creek:

DateOil RunsMCF Sold

26779, see above, EOG, Mandaree 17-05H, Squaw Creek:

DateOil RunsMCF Sold

28666, see above, QEP, Johnson 4-9-4BH, Grail:

DateOil RunsMCF Sold

Graphic and Spacing for the Panzer Well-Pad

News From All Over -- March 31, 2015

Well, that was it. It's a wrap. The US-Iran-French-Chinese-et-al talks have come to an end. A "general statement" will be released later and the group will re-assemble in June, 2015.

Today's EIA Blurb

And here it is:
For the first time, EIA is providing monthly data on rail movements of crude oil, which have significantly increased over the past five years. The new data on crude-by-rail (CBR) movements are integrated with EIA's existing monthly petroleum supply statistics, which already include movements by pipeline, tanker, and barge. The new monthly time series of crude oil rail movements includes shipments to and from Canada and dramatically reduces the absolute level of unaccounted for volumes in EIA's monthly balances for each region…

Total CBR movements in the United States and between the United States and Canada were more than 1 million barrels per day (bbl/d) in 2014, up from 55,000 bbl/d in 2010. The regional distribution of these movements has also changed over this period. --- EIA 
Well, that was helpful. 

In other news, the sun came up in the east today.


The fourth section of The Wall Street Journal today is "Business & Environment." Lots of EPA stuff, green energy stuff, lots of short interviews with movers and shakers. After going through the four or five pages of interviews very, very quickly, I was left with these notes:
  • green energy folks talk a lot in generalities; not a lot of facts or figures
  • everyone in the know agrees that renewable energy accounts for 1% of all US energy
  • think tank representative on renewable energy: "[for solar] there are a range of subsidies, and they are very, very substantial. My back-of-the-envelope calculations of my own system is about two-thirds of the cost is subsidized."
  • as in oil, there are sweet spots when it comes to solar -- the US is not in the sweet spot; Chile is
  • the elite, the rich can personally afford solar panels on their roofs, mostly as tax credits
  • Lisa Jackson over at Apple is still unintelligible
  • when Apple talks about their green energy successes, they are talking apples and oranges (US and overseas) -- their US carbon footprint represents 2% -- two percent -- of their total global carbon footprint (they manufacture almost everything overseas; they have non-carbon-producing retail stores in the US)
I did not read the "Utilities Adapt to a New Era," but I did note the graph that depicts global energy growth over the next 25 years:

  • nuclear power will grow the most: 90% -- probably in China
  • natural gas will grow almost as much: 88% -- advantage -- the US
  • not only is coal still the most important, but coal energy will grow a whopping 51%
  • solar and wind will more than double -- and will approach a third of natural gas energy
  • the amount of energy that will be needed in 2015 is astounding
In another interview (which I can't find on-line but is in the print edition), Robert Murray discusses coal. He notes that "China burned four billion tons last year, a new 500-megawatt power plant, every year. Australia killed their carbon tax. They're going back in coal world-wide."

For The Archives

New York Times -- as US and Iran make deals, Saudi makes its own moves.
As America talks to Iran, Saudi Arabia is lashing out against it.
The kingdom, Iran’s chief regional rival, is leading airstrikes against an Iranian-backed faction in Yemen; backing a blitz in Idlib, Syria, by jihadists fighting the Iranian-backed Assad regime; and warning Washington not to allow the Iranian-backed militia to capture too much of Iraq during the fight to roll back the Islamic State, according to Arab diplomats familiar with the talks.
Through Egypt, a major beneficiary of Saudi aid, the kingdom is backing plans for a combined Arab military force to combat Iranian influence around the region. With another major aid recipient, Pakistan, Saudi Arabia is also expected to step up its efforts to develop a nuclear bomb, potentially setting off an arms race in the region.
Foreign Policy -- How France became an Iran hawk.
France’s policy is dictated by a set of principles with regard to nonproliferation that have guided administrations on both sides of the political spectrum in the talks with Tehran since 2002. And the tension with Washington is just one expression of a larger disagreement between the two countries over U.S. strategy in the Middle East.
Differences between Washington and Paris have been quietly brewing for months. The French feel that they are being kept out of the loop in critical discussions. The multilateral framework of Iran and the P5+1 (the five permanent U.N. Security Council members plus Germany) has turned into a bilateral discussion between Iran and the United States.
At the end of his administration, the president will have thrown everyone under the bus except, a) Valeri Jarrett; b) Iran; and, c) environmental fanatics.

Port Of North Dakota Announces Expansion -- March 31, 2015

KXNET is reporting:
Drilling rig numbers and oil prices are slowing down, but the industrial park in Minot is picking up speed.
Promoters are looking to a 3,000-acre expansion with developing the first 120 acres this year with eight miles of railroad track for easy exportation from the business to the Port of North Dakota on the main track less than a mile away.

Tuesday -- March 31, 2015

Active rigs:

Active Rigs96194188206168

RBN Energy: Infrastructure development in the Marcellus / Utica.
Natural gas liquids production in the Utica and “wet” Marcellus has taken off like a rocket, and all that ethane, propane, butane and natural gasoline needs to be either moved out of the region or consumed there. That presents a real operational challenge to midstream companies, mostly because the Upper Ohio River Valley offers very little of the NGL storage capacity that Mont Belvieu—the center of the NGL universe—has in spades. Storage is the mechanism that helps balance out supply and demand on any given day.  How can the nation’s fastest-growing NGL production play function without the luxury of significant NGL storage? Today, we continue our look at infrastructure development in the region.
It's All About American Drivers

Update on crude oil storage "crisis": Reuters is reporting -- 
A month ago, it seemed inevitable: a massive global oversupply of crude oil production would overwhelm storage tanks in Oklahoma and fill supertankers off Singapore.
Now, there are growing signs that the U.S. oil market can avoid the doomsday scenario in which it runs out of room to stockpile surplus crude, a development that oil traders worried would send crude prices into another tailspin.
I'm still looking for an all-time gasoline consumption record over the 3-day Memorial Day weekend here in the US.


Monday, March 30, 2015

Why Bitumin/Dilbit By Rail Is Not (Necessarily) Safer Than Bakken CBR -- March 30, 2015

A reader sent me this link. It's another dot to connect to help understand the Bakken. RailwayAge is reporting:
The chain reaction fireballs that attended the Feb. 16, 2015, derailment of a CSX unit oil train in populated West Virginia probably blinded observers to the significance of the concurrent derailment and explosions of a CN oil train in a remote and uninhabited area of northern Ontario.
Most reports treated the two events as equals, given that both trains consisted of recently manufactured CPC-1232 tank cars loaded with crude oil.
CN’s Ontario conflagration is the more disturbing of the two mishaps: The railroad reported that its train was not carrying the extra-light Bakken crude that, in a series of high-energy derailments since 2013, has proved to be explosive.
To the contrary, the CN train was laden with bitumen, the extra-heavy tarry substance extracted from Alberta’s oil sands.Undiluted bitumen alone, with a flash point of +151ºC, is considered essentially non-flammable in a derailment event and is rarely considered in safety evaluations of crude by rail. So why did the bitumen ignite and explode in Ontario’s -40ºC (-40ºF) weather?
The reason, based on research consulted by Railway Age, is that the diluent added to make bitumen flow into and out of tank cars makes the blended lading quite volatile.
This is a very important article. Often these articles are archived by/at the source.

When you get done with the article, if the Keystone XL does not come to mind.....

Active Rigs Down To 96 -- March 30, 2015; Six (6) New Permits; Fourteen (14) Permits Canceled

Active rigs in North Dakota:

Active Rigs96194188205168

Six (6) new permits --
  • Operators: EOG (3), XTO (3)
  • Fields: Parshall (Mountrail), Siverston (McKenzie)
  • Comments:
Wells coming off the confidential list Tuesday: None?

Thirteen (13) producing wells completed:
  • 27163, 634, Hess, GN-Tom Jen-157-97-0409H-1, Ray, t3/15; cum --
  • 27371, 114, OXY USA, Delvin Dukart 3-30-31H-143-95, Manning, t3/15; cum --
  • 27397, 115, OXY USA, State Knopik 3-21-16H-144-97, Little Knife, t2/15; cum --
  • 28048, 1,049, Oasis, Harbour 5501 14-5 2T, Tyrone, t2/15; cum --
  • 28178, 1,217, Hess, HA-Rolfsrud-152-96-1720H-2, Westberg, t3/15; cum --
  • 28230, 631, SM Energy, Arlene 30-31-162-98H 2XQ, Ambrose, t1/15 cum 7 1/15;
  • 28370, 1,191, Hess, AN-Brenna-153-94-3130H-5, Antelope, a Sanish well, t3/15; cum --
  • 28374, 913, Hess, AN-Brenna-LE-153-94-3130H-1, Antelope, a Sanish well, t3/15; cum --
  • 28483, 1,368, Hess, HA-Dahl-152-95-0706H-4, Hawkeye, t3/15; cum --
  • 28484, 1,387, Hess, HA-Dahl-152-95-0706H-5, Hawkeye, t3/15; cum --
  • 28729, 121, OXY USA, Delvin Dukart 5-30-31H-143-95, Manning, t3/15; cum --
  • 28730, 288, OXY USA, Delvin Dukart 6-30-31H-143-95, Manning, t3/15; cum --
  • 29219, 1,643, BR, CCU Golden Creek 44-23TFH, Corral Creek, t2/15; cum --
Fourteen (14) permits canceled:
  • CLR: six (6), McKenzie (5); Divide (1), including two Holstein Federal permits and two Hendrickson permits
  • Corinthian: five (5), all in Bottineau County
  • Oasis: two (2), both in McKenzie
  • Whiting: an Oyhus Federal well

Public Service Announcement -- March 30, 2015; Pakistan Sending Troops To Saudi Arabia As Yemen Implodes

I assume most (maybe, all) readers are aware of this site, but if you are not, this is another good site on the net.

If you ever have trouble with your e-mail provider, e.g., Yahoo or Gmail, simply google "Is yahoo mail down" or "Is Gmail down." It's a great site.

This was a screenshot from a few seconds ago after Google reported a Gmail outage -- which appears to have been resolved:

Oh, Why Not?

The Boston Globe is reporting:
Solar energy projects across much of Massachusetts could come to a halt Monday because of faster-than-expected growth since last summer.
Under state law, utilities can only hook up so many solar energy projects to their systems under the so-called “net metering” cap, which limits the amount of excess power utilities have to buy back from solar installations. In the part of the state served by National Grid, that limit may be hit today or tomorrow, which would force companies in the solar industry to rapidly readjust.
As of 1 p.m. Monday, 99.9 percent of the utility’s net-metering cap has been reached for private-sector solar projects. 
The public sector installation cap already has been surpassed, with nearly 10 megawatts of solar projects waiting in line. Other utilities are further away from their caps.
Over the past week, about 20 megawatts of solar power applications were approved in parts of the state served by National Grid, said Ryan Fahey, an employee of the Cadmus Group, Inc. which tracks how much capacity remains under the state’s net metering caps. 
Much, much more at the link.

It begs the question. If solar energy is so great, why is the state that elected Pocahontas limiting the amount of solar energy that can be hooked into the state electrical grid?

Pakistan Sending Troops To Saudi Arabia

Just announced on talk radio.

Sledding In Dallas

EIA Will Now Track And Report CBR On A Monthly Basis -- March 30, 2015

From the EIA:
For the first time, EIA is providing monthly data on rail movements of crude oil, which have significantly increased over the past five years.
The new data on crude-by-rail (CBR) movements are fully integrated with EIA’s existing monthly petroleum supply statistics, which already include crude oil movements by pipeline, tanker, and barge.
“The new crude-by-rail data provides a clearer picture on a mode of oil transportation that has experienced rapid growth in recent years and is of great interest to policy makers, the public, and industry,” said EIA Administrator Adam Sieminski.
“EIA expects that the new data it has developed using information provided by the U.S. Surface Transportation Board (STB) along with data from other third-party sources and our own survey data, will provide key insights into oil-by-rail movements, including shipments to and from Canada,” he said.
“We welcome the cooperation of the STB as well as Canada’s National Energy Board in making these data accessible.”
EIA is initiating the new series with monthly data from January 2010 through the current reporting month, January 2015. CBR activity is tracked between pairs of Petroleum Administration for Defense District (PADD) regions (inter-PADD), within each region (intra-PADD), and across the U.S.-Canada border.

Largest Volume Increase Since Record Keeping Began In 1900 -- 2014 Liquid Production -- EIA

EIA blurb for the day:
U.S. crude oil production (including lease condensate) increased during 2014 by 1.2 million barrels per day (bbl/d) to 8.7 million bbl/d, the largest volume increase since recordkeeping began in 1900.
On a percentage basis, output in 2014 increased by 16.2%, the highest growth rate since 1940. Most of the increase during 2014 came from tight oil plays in North Dakota, Texas, and New Mexico where hydraulic fracturing and horizontal drilling were used to produce oil from shale formations. --- EIA
Memo to self: send note to Jane "there might be some oil there" Nielson:
Frequent Internet users are getting emails about the Bakken Formation in North Dakota and Montana, supposedly a great oil bonanza just waiting to be tapped if only nasty enviros would let it happen. The emails and websites say that Bakken would solve all our petroleum “needs.” (What, me worry about  global warming?)
Don’t believe it. There’s some oil to be gotten out of Bakken, and it’s going to be exploited. But the “bonanza” is nothing but hype.
And never updated. Wow. That posting is almost ... cute.

I was wrong. She did update that posting but I had never seen her update until today. Back in 2011, Jane Nielson tried to claw her way back from her "cute" posting:
Our blogs on the Bakken Formation of Montana and North Dakota, and other “tight” or “bound” petroleum-bearing units, have addressed the fantasy that such shale oil and gas sources will provide the United States (and in some versions, the WORLD) an unending energy bonanza. The unfavorable comments tend to contain put-downs, some couched in a rather personally antagonistic tone. This tends to happen when the commenting parties lack the data to back them up. The comments generally miss the mark, however.
We do NOT say that the U.S. has no extensive oil fields able to keep on producing petroleum for U.S. consumption, nor have we implied that some of the known fields are not currently economic. We do say that the aggregate production will not make up for the steep production declines at a majority of the oil fields that once fueled the U.S. economy and military. As a result, as long as the U.S. economy remains tied to petroleum, we will continue to rely on imports from Canada and beyond.

And, at least according to Google, the site that controls the stories we read, that was the last we heard from Ms Jane.

I wonder if Ms Jane knows that after 30 years of advocacy and a gazillion dollars in subsidies, grants, and tax credits, solar, when rounded to the nearest whole number, provided the US zero percent of its energy needs in 2014.

By the way, doing that quick search brought me to this site. Enjoy.

And another "by the way," by the way, OutRunChange is still running. And a great site. 

Market Shenanigans -- March 30, 2015

I look askance at anyone who suggests the stock market is not "run" by computer algorithms.

How else does one explain the 300-point rise in the market today? Nothing has changed. Whether or not the Iranian deal is signed is a crap shoot, although it is obvious President Obama and SecState John Kerry are willing to sign anything to declare victory (wasn't that the John Kerry on Vietnam: "just leave and declare victory"?).

Greece is still the same, but if it was on the back burner a few months ago, it's not even in the kitchen today, as far as pundits are concerned. One can find a story on Greece today but it's not easy. Before his election, the new Greek leader said he would no longer accept any free cash from Germany; this past week he has been scrambling to get that cash to pay the bills.

I now understand why Obama favors Shi-ite Iran over the Sunnis, his own heritage.

Disclaimer: this is not an investment site. Do not make any investment, financial, relationship, travel plans, or religions decisions based on what you read here or what you think you may have read here. You might have better luck with palm readers in New Orleans or astrologers in west Hollywood (or is it West Hollywood?).

The market is surging, up 300 points, and Tesla continues to fall. It's down a percent in early trading. I think the oil companies are doing even better than that. Shoot, even First Solar is doing better, up about 1.5% in early trading.

Apple is starting to announce the process in which to get an Apple watch. On launch day, one cannot simply walk into an Apple store and buy a watch. One has two options: a) order on-line; b) set up an appointment on-line to meet with a Apple employee at a pre-arranged time in an Apple store.

The in-store reservations are scheduled for 15 minutes for the least expensive watch, and 30 minutes for the $10,000 - $17,000 watch. I had planned to buy the $17,000 watch but could not imagine being bothered by an Apple salesperson for 30 minutes.

There are several reasons for the AppleWatch buying process. Most importantly, it is hoped that this will minimize returns. More importantly, perhaps, it will also eliminate the television coverage of no one standing in line outside the Apple stores on the day of the AppleWatch launch. The AppleWatch story is not going to be anywhere near the iPhone sales volume. This process makes it almost impossible for pundits/analysts to get any clue to how many watches are actually being sold. The AppleWatch has nothing to do with volume or the "bottom line" at this point: it's all about the moat. The entire AppleWatch line widens the moat, but the top end defines Apple as a fashion company, separating it from the also-ran technology companies. Yes, it's a big deal. Apple is up about 1.5% almost 2% in early trading. 

EPD is up a percent. ENB flat (barely green). I don't follow the Bakken companies much any more -- as far as the stock market is concerned, for two reasons. First, too depressing. Second, and more more importantly, I'm waiting for the dust to settle, or as others might say, the Hillary re-set. We haven't see the re-set yet. Current prices for Bakken operators that trade publicly have no connection with reality at this point. Too much in flux.

This past week "they" said the railroads would be under pressure. UNP is up 1.5% today.

Over the weekend I started reading the 50th Anniversary issue of Berkshire Hathaway's annual report. Glossy golden cover. I didn't read much; seemed to be more of the same. The little I read suggests Charlie Munger saved Warren Buffett's hide forty-some years ago, but I probably mis-read.

The most interesting thing that came out of the BRK annual report was the fact that Warren Buffett never gave up, and that he was dealing with very small amounts of cash (relatively speaking) compared to where he is today. That alone speaks volumes; it couldn't have been all luck.

Anyway, enough of this. I don't watch television, so I have no idea what CNBC is saying to explain the 250-point surge. I see that Yahoo!Finance attributes it to ... drum roll ... more stimulus talk ... in Asia.

Wow, gazillions in stimulus -- some irony here -- a transfer of wealth -- all those governments printing money to put into the economy to keep the rich people rich.

Back to the market -- investors in Madison Square Garden have done very, very well.

Remember, this is not an investment site. Do not make any investment or financial decisions based on what you read here or what you think you may have read here. 

Oh, that's right. I was going to say that after reading a few pages of the BRK's 50th anniversary issue of annual reports, I went back to reading Dan Jones' new book, Wars of the Roses, which reminds me. Quick: what's #2 on the Wall Street Journal's hardcover non-fiction list?

This is an interesting list: Wall Street Journal's sixteen books for spring, 2015: it includes ... drum roll...Daniel Yergin's The Prize. It's an old book; maybe it's been updated with a new introduction or forward or epilogue. I still have my old copy and read a little bit of it Saturday. The Japanese attack on Pearl Harbor was all about oil. I might post a bit of that later; very enlightening. How the Japanese failed at Pearl Harbor.

Oh, back to that #2 hardcover, non-fiction book. It's also #2 on the New York Times best-seller list:
published by the South Dakota State Historical Society, Pioneer Girl, by Laura Ingalls Wilder. The writer's biography, the source of her Little House on the Prairie, completed in 1930 and never published, is annotated by a biographer.

Monday -- More Of The Same -- March 30, 2015

Active rigs:

Active Rigs97194188205168

RBN Energy: WTI-Brent split.
This is the latest in a long running occasional series covering the ongoing relationship between U.S. domestic benchmark crude WTI and its international counterpart Brent. Historically (prior to 2010) these two crudes of similar (light sweet) quality enjoyed a close pricing relationship governed by the U.S. need to import light sweet crude to meet domestic demand – with Brent trading at a slight discount to WTI mostly reflecting freight costs. Huge increases in domestic light crude production from shale have changed the relationship over the past four years – including a WTI discount to Brent averaging $18/Bbl during 2012 as new production was stranded at Cushing. That prompted construction of a lot of new pipeline capacity from Cushing to the Gulf.
As new domestic supplies reached the Gulf Coast market – home to 50% of refining capacity and a traditional center of light crude imports - the U.S. reduced its dependence on crude priced against Brent in the international market. The result was that Brent prices disconnected from WTI at the Gulf Coast during 2013. This new situation was confirmed by the behavior of a third crude, LLS – the Gulf Coast light sweet crude benchmark. Instead of tracking Brent – as they had previously, LLS prices began to track WTI meaning that the Gulf Coast market for light crude had become domestic instead of international. We last posted a blog specifically about the WTI/Brent spread back in June 2014. At that time Brent prices were disconnected from the Gulf Coast market and a glut of domestic supplies kept LLS trading close to WTI. At that time of course, (early June 2014) crude prices were over $100/Bbl and the market was in backwardation – meaning futures market prices were lower than prompt month cash on expectations that excess supplies would exceed demand.

With the Cushing market once again oversupplied and a big stockpile weighing on the market WTI is likely to continue trading at a discount to both Brent and LLS. That should be good news for beleaguered rail shippers in North Dakota who have suffered because tighter differentials reduce the netbacks for crude-by-rail transportation versus pipeline alternatives. Otherwise any stronger recovery in crude prices is still largely dependent on higher market demand soaking up the current surplus. Except that is - for support for crude prices from another corner – a weaker U.S. dollar. We’ll take a closer look at the relationship between oil prices and the greenback later this week.

US oil glut story grossly exaggerated? Source for this story -- OilPrice; article by Leonard Brecken.
Even using the EIA’s own data, production is up some 500,000 per day since October or 3.5M per week. So how can more than two times that be added to storage while gasoline demand accelerates to 5% year over year from low single digits? Refinery maintenance is part of it, yes, as well as seasonality as people drive less in absolute terms, so as production continues this would explain storage adds, but to this magnitude?
On a side note I was shocked to see that current storage utilization of oil isn’t even a record; unimaginable given that we are led to believe we are running out of storage! In any event, the seasonal effects will wane considerably in April into May as it always has.
This article seems to be somewhat at odds with RBN Energy. I post this story for the archives; I don't put a lot of stock into the article.

OMG! Oil Executives Met With Geologists

This story interests me not at all -- considering the source and the somewhat dubious headline -- but I'm linking it because if I don't I will have any number of readers sending me the link. The story has to do with oil executives meeting with geologists following the flurry of Oklahoma earthquakes that some were associating with disposal of waste water by-product from fracking. Bloomberg is reporting at Yahoo!Finance

The President's Bracket

In the Final Four, he got two of four. And he's an expert.

Meanwhile, I know nothing about college basketball, follow it not at all, and I got three of four correct in the Final Four. Just saying. [I filled out the bracket at the ESPN website.] And to the best of my knowledge, no one in the world predicted a perfect-64 bracket.

Sunday, March 29, 2015

The Fastest Growing Counties In The USA, 2013 - 2014 -- Six Of Top Fifteen In North Dakota

Posted this afternoon over at Business Insider, the fastest growing counties in the USA:
Blaine County, NE, from 481 to 504. Our granddaughter's water polo meet today was in a natatorium that seats 706 spectators.

President Obama Golfs With Halliburton Director -- March 29, 2015; 15/20 Wells Go To DRL Status

Lots to talk about --

President Obama golfing with a Halliburton director. Lots of story lines. Google it

And just a reminder: US consumption of solar electricity in 2014 rounds to zero percent.


Bakken wells coming off the confidential list over the weekend, Monday:

Monday, March 30, 2015:
  • 27763, 1,569, Oasis, White 5198 12-6 4T2, Siverston, t10/14; cum 88K 1/15;
  • 28586, drl, Hess, LK-A Qtr CIR-147-96-1807H-5, Big Gulch, no production data,
  • 28783, drl, BR, Hammerhead 21-26TFH, Sand Creek, no production data,
  • 28994, dry, Hess, GO-Perdue-157-97-0112H-4, Ray, drilling problems;
  • 29217, drl, BR, CCU North Coast 4-8-23MBH, Corral Creek, no production data,
Sunday, March 29, 2015:
  • 25735, SI/IA, Enerplus, Rain 149-93-07A-12H TF, Mandaree, no production data,
  • 27657, 2,539, QEP, Johnson 3-9-4BH, Grail, t2/15; cum --
  • 28053, 359, Slawson, Ironbank 5-14-13TFH, Stockyard Creek, t12/14; cum 18K 1/15;
  • 28075, drl, MRO, Anthony USA 23-14H, Moccasin Creek, no production data,
  • 28665, 1,974, QEP, Johnson 3-9-4TH, Grail, t2/15; cum --
  • 28667, 2,106, QEP, Johnson 8-5-9-4LL, Grail, t2/15; cum --
  • 28719, drl, Hess, En-Neset-156-94-0706H-5, Big Butte, no production data,
  • 29175, conf, XTO, Granli 34X-20D, Arnegard, no production data,
Saturday, March 28, 2015:
  • 26768, 2,054, EOG, Mandaree 28-05H, Squaw Creek, t10/14; cum 90K 1/15;
  • 27756, 863, EOG, Parshall 74-2127H, Parshall, t9/14; cum 61K 1/15;
  • 28587, drl, Hess, LK-A QTR-CIR-147-96-1807H-4, Big Gulch, no production data,
  • 29030, 1,437, MRO, Dellana Ward USA 14-7H, Wolf Bay, t1/5; cum 18K 1/15;
  • 29218, drl, BR, CCU North Coast 4-8-23TFH, Corral Creek, no production data,
  • 29232, drl, Statoil, Smith Farm 23-14 6TFH, Cow Creek, no production data,
  • 29256, drl, Cynosure Energy, LLC, Glenn Paetz 4-151-89 1, wildcat, 4-151-89, a Madison well, in the reservation, east of the Parshall; not very promising; this is Cynosure's only permit in North Dakota.

27763, see above, Oasis, White 5198 12-6 4T2, Siverston:

DateOil RunsMCF Sold

26768, see above, EOG, Mandaree 28-05H, Squaw Creek:

DateOil RunsMCF Sold

27756, see above, EOG, Parshall 74-2127H, Parshall:

DateOil RunsMCF Sold

Reason #3,857 Why I Love To Blog -- Persia Rising -- March 29, 2015


November 12, 2015: I'm losing track of the scorecard -- who is on whose side.  The map below hardly helps. Iran is on the ground in Syria trying to shore up the Iranian government by fighting ISIS. Today it was reported that ISIS claimed responsibility for two huge suicide bombings in Beirut, in a predominantly Shi'ite neighborhood.
A fiery double suicide bombing terrorized a mostly Shiite residential area of southern Beirut on Thursday, ripping through a busy shopping district at rush hour. The Lebanese Health Ministry said at least 43 people had been killed and more than 200 wounded in the worst attack to strike the city in years.
March 30, 2015: Fiscal Times has one of the best updates/explanations on Iran. Much was written but this speaks volumes:
The Saudi actions began in the small Shiite-majority kingdom of Bahrain, which is ruled by a Sunni royal family. The Saudis provided a small contingency force to suppress the Bahrainis who rose up against their government in 2011. In that case, the Saudi motivation to keep a Sunni government in power was combined with the fear that the fall of the Bahraini royal dynasty would open the door to similar uprisings in Saudi Arabia and other Persian Gulf countries. Add to that the presence of a suppressed Shiite minority that lives in the oil rich eastern region of the Kingdom and the fear that Iran could control Bahrain — all were factors in the Saudi decision to act in Bahrain.
The media's 30-second soundbite suggests Saudi Arabia is homogeneous: Sunni. In fact, the map below certain gives one pause: the Shi-ite presence is not only significant in geographic expanse, the location of the Shi-ite sect in Saudi Arabia has to be concerning for the princes.

Later, 6:41 p.m.: a reader sent me New York Times' Ross Douthat's explanation. Compare Douthat's explanation with mine below -- it's clear which one is more plausible. Douthat's column only explains how things went wrong for President Obama, not his goal and the reason for that goal.

Later, 1:18 p.m.: This is embarrassing to post; everyone knew but me. I've been struggling to find the connection between President Obama and Iran. It's easy to understand why the president will side with Iran when it comes to Israel, but I've been struggling to figure out why Obama sides with Iran (Shi-ite) over Iraq (Sunni). It's well known that President Obama, regardless of where he was born, was raised in a Muslim community through kindergarten and into his elementary school years. But his was a Sunni upbringing (that is also well established). So, the conundrum (not to be confused with corundum, which is a ruby or sapphire) was why Obama was on the side of the Shi-ite Iranians.

I am very, very embarrassed. The answer was obvious. I might have known at one time; if I did, I forgot. The dot to connect: Valerie Jarrett. Ms Jarrett was born in Iran and lived there for five years, through kindergarten (everyone one needs to know in life, one learns in kindergarten). She grew up learning to speak French and ... drum roll ... Farsi (Persian). [Some have said "you are what you eat." Others say your heritage lies in your language.]

The dots are all connected. I can go to bed happy-er tonight.

The only irony: the president and Valerie Jarrett were on a roll to slam-dunk the Iranian deal -- until ISIS screwed up everything. Barack thought ISIS was JV. Another misreading by the president. Now Yemen is involved. Syria is involved. Saudi Arabia is involved. The Egyptians are involved. It's a free fall for the Iraqis and a free-for-all for the Middle East.

[A big "thank you" to the reader who sent me this link -- I read very little of it; but it put me on the path to Valerie.]

And to think, President Obama and Valerie Jarrett were oh, so close. That's why Obama was going to go golfing this weekend -- a celebratory round of golf with a Kerry announcement that the Iranian deal was signed, sealed, and delivered.

It will have to wait.

Sealed with a kiss or return to sender?

Return to Sender, Elvis Presley

Original Post
From Barron's this week:
... most of Congress may still view Iran as an axis evil, but a few brave analysts are starting to pitch it as something else: the next great emerging market.
"Iran is the largest economy in the world by far that remains cut off from global markets ... it's like Turkey but with 9% of the world's oil reserves."
... any nukes-for-sanction deal will throw open Iran's investment gates whatever the next US administration might do. European and Asian capitalists will not turn back so long as Tehran keeps its end of the bargain [which won't be difficult]. 
They will capitalize on the country's heretofore hidden advantages -- a population of 81 million with a vigorous median age of 28, wages as low as Vietnam's but much better education, and a diversified economy that has learned to make everything from cars to vodka [an Islamist nation] during decades of isolation.
... "Iran is the only economy we have ever seen that has a positive trade balance in every one of 70 in every one of 70 export categories, including alcohol [an Islamist nation]."
When one reads that, one almost gets the feeling that Soros, et al, are advising Kerry and Obama.

By the way, quick: if the population of Iran is 81 million, what's the population of Germany? 

Years and years ago, in a different world far away, one of our first friends in a new assignment was Iranian -- he and she were living in northeast North Dakota, most likely Grafton, and if not Grafton, probably Grand Forks. I always got the feeling the Iranians and Americans could have been great allies, then. It will be interesting to see how current events play out.

If sanctions come off, and money flows to Iran, the writing is pretty much on the wall. A unified Iraq is history. Saudi Arabia remains the prize.

Oh, by the way, the answer to the pop quiz: the population of Germany is 81 million. Also.

Quick: How Much Does Jamie Dimon (JP Morgan) Have In Assets?

$2.6 trillion.
Tim's Vermeer

On more than one occasion I have blogged on Tim's Vermeer (e.g., here). It remains on my top twenty  (the second ten) list of DVD movies.

In this week's Wall Street Journal Review, "Through A Glass, Brightly," a book review of Eye of the Beholder, by Laura J. Snyder, c. 2015. The sub-heading: Antoni van Leeuwenhoek and Johannes Vermeer were neighbors in Delft. Still, no one knows if they ever met.

So, did the reviewer (Jonathan Lopez) or the author, Laura Snyder mention Tim's Vermeer? Not that I can tell, unless I missed it. I'm dismayed to say the least. Neither Lopez nor Snyder know as much about the subject as one would expect. A simple google search would have brought Tim's Vermeer to their attention (as well as that of Hockney) on the first page of hits.

The Chinese Are Going To Love A Fossil-Free Future -- March 29, 2015

Some nice data points for fossil fuel. Remember: solar energy consumption was zero percent (when rounded to the near nearest whole number) in 2014. This was a 1.7% increase over the prior year. There are two ways to make money on solar energy: a) through tax credits; and, b) being paid to make speeches on solar energy.

Anyway, here's the WSJ take on a fossil-free world: http://www.wsj.com/articles/donald-j-boudreaux-fossil-fuel-free-is-no-country-for-the-poor-1427493369.

The article is full of data points. This is a typical observation:
For hundreds of millions of desperately poor people in China, energy-fueled industrialization is the best hope for a better life. Asking the Chinese government to reduce carbon emissions means asking them to commit millions of their people to poverty, condemning them to a hand-to-mouth lifestyle. “Many people think that China should take the lead for driving the clean [energy] revolution,” Wang Yi, a climate-change expert at the Chinese Academy of Sciences, told a United Nations forum on sustainability in 2012. “But China is facing a lot of challenges.”
The same could be said of India. 

Yada, Yada, Yada

Disclaimer: this is not an investment site. Do not make any investment, financial, relationship, or travel decisions based on anything you read at this site or anything you think you might have read.

ONEOK Hits A Speed Bump

SeekingAlpha article. To newbiews: SeekingAlpha articles are generally archived at the source. 
Bakken and Three-Forks drilling economics are largely based on the price of oil. Crude produced from the Bakken and Three-Forks formations have been fetching a steep $10-$15 discount to WTI, which has exacerbated the decline for oil producers in the region. The number of oil rigs operating in North Dakota has been more than cut in half over the past year, and now sits at 98. This is the lowest number since March 2010. North Dakota's oil production fell from its all-time high of 1.23 million bo/d in December 2014 to 1.19 million bo/d in January 2015.
Low natural gas, oil, and NGLs [natural gas liquids] prices took a huge toll on ONEOK Partners LP's distribution growth prospects. ONEOK Inc, the general partner, had to also reduce its growth guidance as distributions from ONEOK Partners [the MLP, master limited partnership] are going to come in much lighter than previously expected.
Originally, ONEOK Partners was forecasting to generate $1.31 billion-$1.47 billion in distributable cash flow [DCF, the cash left over after costs that an MLP can distribute to unitholders] this year. That was reduced to $1.08 billion-$1.26 billion when management updated ONEOK Partners' guidance in its Q4 2014 earnings release.
Slightly higher gathering and processing volumes mitigated only a portion of its exposure to lower prices. Natural gas liquids prices, especially for butane and propane, trade in tandem with oil prices. When oil fell, so did NGLs prices, which negatively impacted ONEOK Partners' commodity and differential based operations.
  • After ONEOK Partners' sharply lowered guidance, its distribution isn't on solid footing and will have to be supported by debt.
  • Low NGLs and condensate prices stemming from low oil prices took a big swipe out of ONEOK Partners' distributable cash flow.
  • ONEOK Partners is guiding for its distribution coverage ratio will range between 0.87x-0.97x this year as its DCF stays flat.
  • ONEOK Inc on the other hand plans to post a dividend coverage ratio of 1.21x and will generate $105 million in FCF in 2015.
  • After its guidance update, I'm far less bullish on ONEOK Partners as an income investment and prefer ONEOK Inc due to its dividend coverage ratio. 
Slowing Trains Down

I can't remember if I posted this article. I don't think I did. The link was sent to me by a reader -- as are most great stories that get linked at the post. Thank you.

The Dickinson Press is reporting:
BNSF began a move Wednesday to have all of its oil trains reduce speeds to 35 mph through all municipalities with 100,000 or more more residents. The speed reduction is temporarily in place until its customers phase out DOT-111 tanks cars from service, BNSF spokesman Mike Trevino said Saturday. Phasing out of the older cars, which will be replaced by CPC-1232 railcars to meet federal safety standards, is expected to begin in May, and BNSF hopes to complete the process by the end of the year. When that happens, BNSF will reconsider the speeds.
The shipping companies, not BNSF, own the cars, so the railway company has to wait on its customers to make the transition to the newer cars. The move was a voluntary part of an agreement with the U.S. Department of Transportation.
Bill Nye, The Science Guy

IceAgeNow is reporting:
“The answer is to do everything that we possibly can, all at once,” says Nye. “More efficient electricity. More efficient transportation… More efficient cities. More efficient farms. Raising the quality of life, especially women and girls.”
You’ve more than doubled the number of people burning and breathing the atmosphere in the last two decades, I mean, that’s your problem. So we need to reduce the human population… by the way, war is completely ineffective, ebola will not do it.”
I have not verified if that is an accurate quote or if it taken out of context. If accurate, he must have been off his meds. If accurate, hopefully he is never hired by Germanwings.

Saturday, March 28, 2015

The New Persian Empire -- March 28, 2015


March 30, 2015: see map of Sunni - Shi-ites in the Mideast

March 29, 2015: I woke up early this Sunday morning, anxious (as in "worried") whether I should have posted the note below. Was I a bit ahead of my headlights? Apparently not. This from The New York Post:
Iran long held designs on a Shia Crescent and control over Arab lands, which helps explain why Egypt, Saudi Arabia and others counted themselves as our allies. They are furious as they watch Iran get a nuclear pass from Obama and a green light to expand its power.
The nuclear program will have the United Nations stamp of approval, as will Iranian control of four Arab capitals — Damascus, Beirut, Baghdad and now Sanaa, Yemen. Indeed, Obama and Secretary of State John Kerry suggest Iran even could be an ally in the fight against Islamic State and al Qaeda. Already there has been coordination there, leading critics to say America is acting as the Iranian air force.
Sightings of the Revolutionary Guard leader, Maj. Gen. Qasem Suleimani, leading Iranian-sponsored militias against Islamic State in Iraq has spread alarm throughout the region. The fears reached a fever pitch when Iranian-allied Houthi rebels took over Yemen, chasing out our soldiers and allies with chants of “Death to America, death to Israel.” 
Major General Qasem Suleimani could easily become Suleimani the Magnificent.

Original Post

Earlier today (or was it yesterday?) I debated whether to add "The New Persian Empire" as a Big Story.

I've been out and about all day, and just got back to blogging about an hour ago, and now a few minutes ago, started reading the news.

Isn't this interesting? YNET news is reporting:
Analysis: Israel has spent five years warning that Iran seeks Shiite domination of the Muslim world, and the Gulf States know by now not to rely on the Obama administration. 
Operation Storm of Resolve, designed to rescue Yemen President Abd-Rabbu Mansour Hadi's regime from the clutches of the Houthi rebels, began with an exercise in misdirection.
At midnight between Wednesday and Thursday, the first squadron of Saudi Arabian fighter planes launched attacks on targets in the Yemeni capital, Sana'a – air force bases, arms depots belonging to the rebels, the palace of former president Ali Abdullah Saleh, and a reserve forces base in the south of the city that was taken by the rebels last month.
The strike caught the rebels by surprise. At a meeting earlier on Wednesday night between Houthi rebel leader Abdul Malik al-Houthi and ousted president Salah, the two had coordinated an assault on Aden, Yemen's second-largest city.
"If Aden falls," the ousted president promised, "Yemen will fall, and the forces will be able to turn their attention to the greater task at hand – taking control of the Bab-el-Mandeb Strait for the purpose of overseeing marine traffic into the Red Sea."
Yada, yada, yada .... 
A spokesman for the Houthi rebels responded in kind, commenting: "We have already proved to you in 2009 how easy it is to invade the territory of the kingdom. Your army is weak. Today we are more skilled. When we decide to invade, we won't stop in the city of Mecca, but will continue on to Riyadh to topple the government institutions."

I didn't read the rest of the article so I don't know how much history was covered in the article.

Three data points that need to be kept in mind. Before the overthrow of Saddam Hussein, Iraq and Iran were constantly at war, and kept each other somewhat "contained." Iraq was unable to take advantage of Hussein's overthrow and it looks like it's just a matter of time for Iran to be the dominant military resident power in the region.

The second data point: for whatever reasons, Iraq has fallen off the radar. The news that is coming out of Iraq suggests that it is going the way VP Joe Biden suggested many years ago: the Balkanization of Iraq. It's just a matter of time before the southern third of modern-day Iraq becomes the 32nd province of Iran. Sunni Iraq will have Iran/Syria/ISIS to the north; ISIS internally; and Iran to the south.

The third data point: Sunni Saudi Arabia is now surrounded by Shiites. (See inset in above graphic.)

Saudi Arabia is The Prize.


The Iran/Syrian/ISIS coalition has eighteen (18) months of opportunity. President Obama leaves office in about 22 months.


Another data point: with regard to Iraq; with regard to Iran; with regard to ISIS -- from the point of view of the Saudis, the US, the French, the British, who's in charge? Where's the unity of command, perhaps the most important principle in warfighting.

International News -- March 28, 2015; China To Increase Oil Production; Russia May Extend Invitations; Shell Getting Eager


April 1, 2015: Rigzone is reporting -- 
The U.S. Interior Department on Tuesday upheld a 2008 lease sale in the Chukchi Sea off Alaska, moving Royal Dutch Shell a step closer to returning to oil and gas exploration in the Arctic since it suffered mishaps in the region in 2012.
"The Arctic is an important component of the Administration's national energy strategy, and we remain committed to taking a thoughtful and balanced approach to oil and gas leasing and exploration offshore Alaska," said Interior Secretary Sally Jewell.
Interior's Bureau of Ocean Energy Management will next consider Shell's exploration plan and perform an environmental assessment on it, which could take at least 30 days. Shell lost control of a massive oil rig called the Kulluk in 2012, which eventually ran aground. But in anticipation of returning to the region for the first time since then, Shell has already moved rigs to Alaska.  
Original Post

Reuters/Rigzone is reporting:

Royal Dutch Shell is moving oil rigs to Alaska ahead of the possible resumption of controversial drilling activities as the oil major awaits the green light from U.S. authorities.
The Anglo-Dutch oil major hopes to revive its Arctic drilling programme two years after the grounding of a rig in Alaska that led to a huge uproar from environmental groups.
But even before getting the go-ahead from the U.S. interior secretary, Shell is moving the drilling rigs Noble Discoverer and Polar Pioneer to the area in anticipation of the short operations window in summer. The vessel are "heading to North America ahead of a potential 2015 drilling season," a Shell spokeswoman told Reuters.
"Any final decision to go forward with a 2015 season will depend on successful permitting, clearing any legal obstacles and our own assessment that we are prepared to explore safely and successfully." 
Not holding my breath. I think Barack Obama is president of the US through the end of 2016.

Reuters/Rigzone is reporting:
China's top offshore oil producer CNOOC Ltd said on Friday it aims to boost output by 18 percent over the next three years, after reporting stronger-than-expected 2014 profit on cost cuts and higher production.
CNOOC, China's third largest oil company, plans to boost output to 513 million barrels of oil equivalent (BOE) in 2017, up more than 18 percent from 2014, chief financial officer Zhong Hua told reporters at its results briefing.
But cost cuts will also be a top priority as it braces for long-term oil price weakness. Last month, CNOOC said it planned to slash 2015 capital spending by 26-35 percent to 70 billion-80 billion yuan, while still trying to raise output by up to 15 percent to 495 million BOE.
"The company... has sensed the pinch of the 'cold winter'," CNOOC's chairman Wang Yilin said in the firm's earnings filing. "In 2015, we may face even more severe environment for our exploration and development."
CNOOC on Friday reported net profit of 60.2 billion yuan ($9.69 billion) for last year, up 6.5 percent year on year, as cost cuts, lower tax payment and higher output helped offset the slide in global oil prices. That beat a consensus forecast of 52.3 billion yuan from 23 analysts polled by Thomson Reuters. 
Peak oil?

Reuters/Rigzone is reporting:
Russia may allow more oil companies to access its offshore projects, Energy Minister Alexander Novak said on Friday.
"In general, the access can be extended," Novak told reporters in Moscow. An existing law stipulates that only state energy majors Rosneft and Gazprom can explore offshore fields. But Lukoil, Russia's No.2 oil producer, has long called for extending access to private firms as well. 
The strain is showing.

Update On Oil Income For The State Of North Dakota -- Less Money For State Capitol Renovations, I Guess -- March 28, 2015

Mostly for the archives; I think most of the data points have been reported earlier. The AP is reporting:
Two years ago, North Dakota was so flush with money from the energy boom that lawmakers spent over $1 million to spruce up the cafe at the state Capitol.
Now, the fall in oil prices has tightened the revenue tap and the nation's fastest-growing state is contemplating a dose of austerity. The price of North Dakota sweet crude has fallen by nearly half from a year ago to about $47 per barrel.
On Tuesday, only 100 rigs were drilling in the state's oil patch, barely half the number a year ago and the lowest since March, 2010. Each active oil rig represents about 175 direct and indirect jobs in North Dakota. The level of drilling is not enough to keep North Dakota's oil production, which is second only to Texas, at its current rate and it could fall slightly over the next two years.
"We're starting to see a financial strain on all aspects of the industry," said Ron Ness, president of the North Dakota Petroleum Council, which represents some 500 companies. That is bad news for state government. In just four months, the state's projected revenues for the next two years have gone from $8.3 billion in December, to $4 billion in January and just $3 billion in the latest forecast.
I don't know exactly what "...$1 million to spruce up the cafe at the state Capitol" was all about but if accurate .... 

.... and then folks wonder why voters are cynical.

Update On The Sandpiper -- Nothing New -- For The Archives -- March 28, 2015; North Dakota Loses First Place Status As State With Lowest Employment

This Dickinson Press article is simply for the archives.
Enbridge CEO Al Monaco made a half-hour long presentation at the Minneapolis Club for the Canada Minnesota Business Council. The transportation company is the parent company of the North Dakota Pipeline Company, which proposed the 616-mile pipeline that would stretch from near Tioga, ND, to Clearbrook, MN, and on to Superior, WI.
Same story, different spin. This time The StarTribune is reporting:
Even as the U.S. oil industry slashes investment, pipeline operator Enbridge Energy isn’t paring back its record five-year, $44 billion building program that includes major projects in Minnesota, the company’s CEO Al Monaco said Friday.
Monaco said in an interview that the 50 percent drop in crude oil prices since June “is very dire” for the industry, but hasn’t changed the economics of pipelines like Enbridge’s proposed Sandpiper project to deliver North Dakota oil across northern Minnesota to a terminal and other pipelines in Superior, WI.
“The amount of production that is coming on to our system and the amount of production we forecast from the oil sands or the Bakken is actually well in excess of the capacity we have on our system,” said Monaco, whose company operates the world’s longest crude oil pipeline system and has major operations in Minnesota and Wisconsin.
Monaco told the Star Tribune that he sees no significant change in the company’s investment plan, which is focused on liquid pipelines. Most projects, he said, are secured with contracts or are already underway. The share in Minnesota is $5 billion, he added.
I have no dog in the crude oil pipeline fights.

Meanwhile, the AP is reporting:
U.S. Bureau of Labor Statistics data released Friday show North Dakota's jobless rate in February was 2.9 percent, up from 2.8 percent in January. Nebraska now has the lowest unemployment rate in the nation at 2.7 percent.
A nice graphic of unemployment in North Dakota, county by county.

A Breath Of Fresh Air

The Guardian is reporting:
A 25-year-old British military healthcare worker who admitted she was too scared to tell her family that she had Ebola has been successfully treated for the disease.
Cpl Anna Cross was diagnosed while working in Sierra Leone this month. The 25-year-old from Cambridge was the first Ebola patient anywhere in the world to be given the experimental drug MIL 77, and has now been discharged from the Royal Free hospital in London.
Cross joined the army reserves in 2013 as a staff nurse and volunteered to travel to the country in February to help care for Ebola patients. She was flown back to the UK on an RAF plane on 12 March.
At a press conference at the Royal Free on Friday, she said she had been treated by an “absolutely incredible bunch of clinicians”.
“I’m a military health worker and in my civilian job I work for the NHS as an IT nurse,” she said. “If it wasn’t for both those institutions I wouldn’t be here today. I was diagnosed in the treatment facility I had worked in by the colleagues I worked with. That gave me confidence, because they were professionals. They put me on a flight less than 24 hours after I was diagnosed. Thanks to the team here, who I would say are the best in the world at treating this disease … I’m alive.”
 This might be the "original" story.

Weekly Ebola situation reports can be found here.