A Little Personal Story For The Archives -- January 24, 2015

Louis Dreyfus Commodities has a grain elevator in Portland, OR. Back in late 2012, Louis Dreyfus announced a $21 million "update" to that Rose Quarter grain elevator.

Louis Dreyfus Commodities will invest $21 million to remodel and update its grain elevator near the Rose Quarter.

Louis Dreyfus is the latest grain operator to announce investments totaling more than $65 million this month.

In early December, Columbia Grain Inc., said it would invest as much as $45 million over the next 30 months to expand its Portland grain handling facility. Columbia Grain will expand its T-5 operation following a 25-year extension of its lease with the Port of Portland.

In 2011, Louis Dreyfus said the grain exporting facility processed a record amount of grain and that all elevators on the Columbia River system were operating at capacity, hinting at the need to expand capacity.

The renovation has been completed. The photos of the project can be found here.

But that's not important.

This is what caught my eye. Do you see that ship in the photos? That's the Almasi. The Almasi is a bulk carrier ship.

It is the first ship to anchor at the new Louis Dreyful Rose Quarter grain elevator in Portland. One can track the Almasi at this site.

But that's not important.

This is the important part.

The grain that is being loaded unto the Almasi, the first ship to take on grain from newly renovated Rose Quarter elevator is grain that was grown in North Dakota.

I do not know the name of the North Dakota farmer(s) whose grain that was, but if the fields were in northwestern North Dakota, it was very possibly my dad's agency that "wrote" the crop insurance. Back in 2011 I had the pleasure of reconciling crop insurance policies for that agency during a short stint on staff.

As noted: I do not know the name of the North Dakota farmer(s) whose grain that was, but my operatives are hot on the trail. LOL.

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Addendum

This really is a wonderful country. The information above is accurate to the best of my knowledge but it was written a bit tongue-in-cheek. But think of all the little "things" that went into that "process." A farmer in North Dakota growing the grain that somehow gets from the field to the train, and then from the train to the port, and then unto the ship. Think of all the individuals that were involved in developing, marketing, and selling the seed that was bought by the farmer. Think of the three or four generations of Scandinavians or Syrians or Germans or Ukrainians or Russians who immigrated a century ago and homesteaded the original farms in North Dakota. The farm was passed down from generation to generation. Think of all the folks that would have insured the crops over the years through a Federal crop insurance program. Think of the technological improvements of the farm tractors. Think of the one-lane gravel roads that are now four-lane divided highways, and the single railroad tracks that are now double or triple tracked. Think of all the dispatcher, engineers along the way. Think of the men and women who manufactured the train cars. To me, it's simply a marvel that these things all come together.

And if that farm is in the northwest part of the state, there is probably a Bakken well producing oil that will end up on the East Coast of the United States or in Texas, via Cushing, Oklahoma.

The Baton Has Been Passed: The US Is The New "Crude Oil Swing Producer" (Again) -- Daniel Yergin, New York Times, January 24, 2015

Wow, I recently posted this as one of my own thoughts. Now being tweeted: Saudi Arabia's role as global oil's "swing producer" has passed to....the United States? See Daniel Yergin's column in this weekend's New York Times. It begins:

A HISTORIC change of roles is at the heart of the clamor and turmoil over the collapse of oil prices, which have plummeted by 50 percent since September. For decades, Saudi Arabia, backed by the Persian Gulf emirates, was described as the “swing producer.” With its immense production capacity, it could raise or lower its output to help the global market adjust to shortages or surpluses.

But on Nov. 27, at the OPEC meeting in Vienna, Saudi Arabia effectively resigned from that role and OPEC handed over all responsibility for oil prices to the market, which the Saudi oil minister, Ali Al-Naimi, predicted would “stabilize itself eventually.” OPEC’s decision was hardly unanimous. Venezuela and Iran, their economies in deep trouble, lobbied hard for production cutbacks, to no avail. Afterward, Iran accused Saudi Arabia of waging an “oil war” and being part of a “plot” against it.

By leaving oil prices to the market, Saudi Arabia and the emirates also passed the responsibility as de facto swing producer to a country that hardly expected it — the United States. This approach is expected to continue with the accession of the new Saudi king, Salman, following the death on Friday of King Abdullah. And it means that changes in American production will now, along with that of Persian Gulf producers, also have a major influence on global oil prices.

America was once, by far, the world’s largest oil producer and exporter, and its swing producer. The Texas Railroad Commission determined “allowable” levels of production for Texas, the Saudi Arabia of the day. But by 1970, United States oil production had reached its high point of 9.6 million barrels per day and began to decline.

Much more at the article.

Spoiler alert: we're not going to see $100 oil again; and, the baton has been passed: the US is now, once again, the global "crude oil swing producer."

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Love Story

From The Washington Post:

They met at an art show.

She was a painter displaying her abstract landscapes, a single mother of three daughters who’d grown up on a chicken farm in South Korea. He was a wealthy bachelor with more interest in politics than art who had stopped by the show in suburban Maryland on a whim.

His eyes didn’t gravitate to the paintings.

“I was more interested in the artist than the art,” he said.

He gave her his phone number, but she never called. Still, he didn’t give up. They eventually met again, fell in love and married several years later, in 2004.

Spoiler alert: they are still in love.

Cape Wind Suspended -- January 24, 2015

Updates

January 25, 2015: same story; its dateline was January 23, 2015, but it was made a Fox headline story on January 25. I'm not sure why Fox delayed posting the story for several days, perhaps waiting for a slow news day:

An ambitious and controversial push to erect America's first offshore wind farm has been dealt what some call a potentially "fatal" blow after two utility companies pulled out of commitments to buy energy from the lagging operation. 

The $2.6 billion Cape Wind project, a private operation benefiting from millions in federal subsidies, is attempting to pioneer offshore wind energy in pursuit of an eco-friendly, sustainable energy supply. Wind turbines would be installed off the coast of Massachusetts' Cape Cod in Nantucket Sound.

But Cape Wind is now in limbo after utility companies terminated huge purchase agreements. They pulled out after the project failed to meet two requirements by Dec. 31: to secure financing and begin construction. 

The wind farm was relying on NSTAR and National Grid to purchase a combined 77.5 percent of its offshore wind power. 

But Greg Sullivan, a former inspector general of Massachusetts who now works at the Pioneer Institute in Boston, said Cape Wind was struggling to find a buyer for the rest of the energy.
"And because they couldn't do that, they had to let the deadline slip with the utility companies. And they walked," Sullivan said. "And I would be very doubtful they would come back." 

Original Post

Some interesting stories if you run out of things to do today.

First, another update on Wind Cape off Cape Cod, Massaschusetts. A similar story was posted/linked earlier, but there are some additional updates in this story being reported by The Boston Globe in which the headline is "more doubt is cast on Cape Cod as developer drops two (2) land contracts."

Two new developments:

• the developer was suspended from participating in New England's wholesale electricity markets by ISO New England --which operates the region's power grid
• the developer has terminated contracts to buy land and facilities in Falmouth and Rhode Island (the staging facility for the project)

These new developments are on top of earlier setbacks when two Boston utilities walked away from the project becasue the developer failed to meet contractual deadlines. Those two utilities (under duress) had agreed to purchase up to 77% of the electricity generated by the project. The project was unable to find a purchaser for the other 23% and even if all 100% of the electricity was purchased, some wondered whether the project was financially viable; at 77% - not even close.

The usual talkative Mark Rodgers, a spokesman for Cape Wind, said, "I can't say why" the developer terminated contracts for two tracts of land which were to be the staging area for the project.

I think I can say "why." Dead.

When the Cape Wind project is suspended from even sitting at the table, that speaks volumes.

This all occurred when oil and natural gas were becoming quite expensive (this is a decades-old project); with price of natural gas and oil plummeting, it's going to be more difficult to justify the economics of wind power.

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Natural Gas Pipeline To Boston

Meanwhile, another story about energy in the Boston area has to do with natural gas. The Boston Globe is also reporting that the federal government has determined the environmental impact from a gas pipeline proposed for Boston and surrounding suburbs isn’t severe enough to prevent the project from proceeding.

However, there might be other concerns: can the antiquated Boston / New England natural gas pipeline in the neighborhoods handle the high pressure natural gas that would be arriving from the Marcellus and the Utica?

Another Boston Globe story notes that leaks in Boston area natural gas pipelines much more excessive than originally thought.

The amount of methane leaking from natural gas pipelines, storage facilities, and other sources in the Boston area is as much as three times greater than previously estimated — a loss that contributes to the region’s high energy costs and adds potent greenhouse gases to the atmosphere, according to a new study by scientists at Harvard University.
The leaks would be enough to heat as many as 200,000 homes a year and are valued at $90 million a year, the authors said.

The study — the first of its kind to quantify methane emissions from natural gas leaks in an urban area — also suggests that regulators are substantially underestimating the amount of the nation’s methane emissions. Methane is 20 times more powerful than carbon dioxide, meaning small amounts of the heat-trapping gas can have a significant impact on global warming.

I don't know if folks have been following the stories in Los Angeles with a number of city water mains bursting and flooding large areas of residential and commercial property. There has been some thought that Angelinos, by conserving water (using less of it; opening their taps less often) have inadvertently been raising the water pressure for longer periods of time in the old water mains, thus resulting in more frequent burst water pipes. I don't know if that's even feasible but even The Los Angeles Times has mentioned that (more than once). It makes one wonder if the Boston area might have more natural gas leaks as more natural gas is used.

Sort of like flaring.

Look for Pocahontas to request federal funding to fix the Boston methane problem in the name of global warming. If she is successful, all of us will feel better helping Boston pay for another "really, big dig."

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 The Obama Library

This is an interesting article. It's called a "trial balloon." No matter how many times you read the article and how many "ifs, ands, and buts" you come up with, it's clear as anything I've ever read: President Obama has selected his site for his library and the city of Chicago will accommodate, although it appears "no one" really wants it at the park near the University of Chicago. 

Look at the other three competing sites for the library: University of Illinois-Chicago; Columbia University (NYC); and, Hawaii.

The last two are not even in the running. No one except a few scholars would ever visit the library if it were in Hawaii, and NYC is pretty much owned by Hillary -- that's where her SecState Library will be going -- across the street from Bill's apartment. That leaves the other two Chicago sites, and it sounds like the University of Chicago has the "wink and a nod."

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Pennsylvania's $2 Billion Problem

The New York Times is reporting:

Energy prices are in steep decline just as [the new governor] Mr. Wolf seeks to persuade reluctant state lawmakers to increase taxes on fracking, the natural gas extraction method that had revitalized the fossil fuel economy here.

In summary, this job may not be as sweet as a Pennsylvania Farm Show milkshake.

Mr. Wolf says that taking on his first elected job at age 66 under tough circumstances is the natural next step of his life narrative. “A $2 billion budget deficit in a perverse way excites me,” he said in an interview at his sparse transition office, where a red tie sat lonely on his empty desk, as if waiting for a serious moment to leap to the neck. “I am a guy who dropped out of Dartmouth to join the Peace Corps and then went back to work in a lumber company.”

A $2 billion budget deficit would excite me, also -- just as a visit to the dentist with several impacted molars and an abscess would excite me on my way to the dentist.

By the way, these are the two most notable things missing from the article:

• first, no boilerplate "controversial method of extracting natural gas" which generally is printed in every NYT story on fracking; and,
• no mention of either George W Bush or Dick Cheney as the reason for Pennsylvania's financial problems. 

From a much earlier post:

• Pennsylvania: Pennsylvania and 29 other states in deep trouble because they "pencilled" in Medicaid money from federal government; now they can't count on it. Don't worry: Pelosi, Reid, and Obama won't let the states down in an election year. June 7, 2010.

What's that got to do with today's NYT's article? From the linked article:

[The former governor] elected not to increase Medicaid under the Affordable Care Act, leaving millions of dollars in Washington that could have defrayed health care costs in the state. And he cut the state’s capital-stock and franchise tax, lowering revenues by roughly $600 million a year. Between 2010 and 2014, 27,000 education jobs were lost in the state, among other cuts.

In addition:

Like nearly every other state, Pennsylvania was hit hard by the 2008 recession. But a variety of features make the state’s recovery more challenging. Years of short-term fiscal bandages, like injections of tobacco-tax and stimulus funds, and deferred payments to managed-care companies, could not cover falling revenues. It is one of the few energy states that does not have an extraction tax on fracking, and it also has a flat income tax of 3.07 percent, meaning that boom times for the rich do not help the budget here as they do other states.

While revenues have been relatively flat, the use of state services has not. Medicaid and pension costs have ballooned. According to a report by the Independent Fiscal Office, Pennsylvania’s pension contributions are expected to increase 18.3 percent to nearly $1.7 billion this year.

A flat income tax? Wow. I thought the liberal east coast elitists were a bit more progressive. Wow.

No extraction tax on fracking? Say what?

Deferred payments to managed care companies? Oh-oh.

Giving up Federal money for health care. Hmmm.

I track Doomsday: The US States here. This is only the second time Pennsylvania has made the list; the first time was back in 2010. It looks like we will see Pennsylvania on the list a lot more over the next four years.