Weekend Update, Part I -- June 6, 2015

For those paying attention, this was quite a week for the oil and gas industry. Lots of news.

Fracking. Of course, the biggest news was that the EPA published its "final" report on the safety of fracking and risk to ground water. None. The story was reported everywhere but hardly made the news, if that makes sense. When a story like that makes so little news, there's only one explanation: there was no way to "spin" the story. So the mainstream media printed the story, some even made it the headline news for about 15 minutes, and then moved on. Last I heard Governor Cuomo of New York was trying to get a copy of the report. He knows there must be something in the fine print to support his case.

Flinching? Not. First story I saw this morning, before I got out of bed, while reading the news on my iPad, the Reuters story, "North Dakota refuses to flinch as OPEC keeps output high." I might get back to this story later.

Fudging the data. NOAA proves that it can come up with any number it wants with regard to global warming. When they didn't like the studies that show there has been a hiatus of 19 years of global warming they went back and did what any good freshman college student does: fudge the data. And lo and behold, they got the exact number they wanted. The number was so perfect, the last I heard, Governor Cuomo of New York was trying to get a copy of the original report. Never mind that Antarctic sea ice hit a new record in area coverage. Boston broke its record for low temperature this past week (for that particular date).

Breaking news: OPEC will not cut production. First of all, this is no longer "OPEC." If it wasn't clear in the past, it's clear now: Saudi Arabia is driving the show in the Mideast when it comes to oil. When it comes to territory, ISIS is running the show, but I digress. Back to OPEC Saudi Arabia. OPEC is dead. I think this is the most interesting story with regard to Saudi Arabia and oil production: for all they claim to be doing, their overall production has not changed much. I posted a long note on this yesterday. It's worth re-reading. The site is still free.

Signaling? It appears that perhaps, just perhaps, Saudi Arabia is tired of giving their oil away for $50/bbl. Some weeks ago, there was word on the Arab street (Governor Cuomo of New York is trying to get a copy of that story) that the princes were willing to let oil drop to $20 to prove their point. Moments after saying they wouldn't cut production -- the princes signaled they were happy with $60 - $80 oil. I think it was MRO, with reference to North Dakota, who said $40 is too low for the Bakken, and $100 is too high.

In trouble? I think California may be in more trouble than some folks realize. When Exxon says they want to start transporting oil by truck convoy, in a state that hates oil, especially when they can see it, it's not going to be a pretty picture. Remember, when it comes to crude oil pipelines coming into California, the state is no better off than Hawaii. The state doesn't like rail, except for the bullet train. One wonders if Saudi Arabia has found a new market.

Sandbagging. The Minnesota PUC approved the certificate of need for the Enbridge Sandpiper. It was a close vote, 5 - 0. No abstentions. The lead group opposing the pipeline says they are not anti-pipeline, but simply NIMBYs. They apparently don't mind that Minnesota plans to clear-cut forest to make room for a gigantic (500 kV) transmission line to bring electricity from Manitoba to back up redundant electricity (but mandated by Minnesota) provided by a Florida wind farm operating in North Dakota. Or something like that. The good news for the NIMBYs -- they can drag out the process approving the route for decades, although I imagine it will be dragged out for about a year. Once everyone gets their due "respect" (i.e., their share of the money), the route will be approved. Most agree that the pipeline will be underground.

Supply squeeze? Reuters/Rigzone suggests a "new" supply squeeze could occur as early as next year. It will certainly occur by 2017, but I've also suggested it could occur as early as next year.

Greece: Another 5 - 0 vote, it appears. Merckel, IMF, ECB, Hollande, and EC agreed to let Greece delay its June 5th payment to the end of the month. They were not clear "which month." They weren't really clear about "which year" for that matter.

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Ground has just been broken for new Williston High School, April, 2015, on the far northwest corner of Williston, North Dakota, looking to the west, toward Montana.