FBI Seems To Be Interested In Anti-Keystone XL Activists -- National Post -- February 9, 2015

This is an incredibly interesting article sent to me by a reader.

A long time ago -- long-time readers might remember -- I posted several stories on mega-load protests (I even have a tag on megaloads).

The National Post is reporting that the FBI seems to be interested in anti-Keystone XL activists:

But activists say oilsands opposition appears to be the common thread among people being contacted [by the FBI]. Police have been in touch with people from different groups, who in some cases don’t agree on much, but one thing they share is mutual participation in the so-called megaload protests.

Those are the intermittent highway blockades set up the last few years to complicate the enormous, football-field-sized shipments of processing equipment up to the oilsands.

Yost said only two people from her group participated in that anti-oilsands action — and those are the people who’ve been contacted by the FBI. She has refused to co-operate.

The other person, Herb Goodwin, was visited at home by an FBI agent and a veteran detective from the local police force in Bellingham, Wash. He said the federal agent told him: “We’re here to ask whether you’ll answer some questions for us about Deep Green Resistance.”

That group, DGR, calls itself a radical environmental movement that believes the biggest problem with the planet is human civilization itself. It proposes a shift back from agriculture to a hunter-gatherer horticultural lifestyle.

I think it's pretty easy to see what the FBI is interested in, but I will keep my thoughts to myself.  I don't think it has anything to do with the Keystone XL per se.

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Not What It Seems

I had not seen the 2011 movie Tinker, Tailor, Soldier, Spy until last night (DVD). Tonight I watched it again with the commentary "on." Wow, what an incredible movie. The final "montage" is ... I have no words to describe it. See also this review.

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La Mer , Julio Iglesias

Reason #10 Why I Love To Blog -- February 9, 2015 -- Here We Go Again; OPEC Signaling A Price Increase?

Here is simply another incredible story.

This is why I started blogging -- to better understand the oil industry in North Dakota. Had it not been for the blog the story being reported at Rigzone would have made no sense. This will probably be the top story of the week.

Rigzone is reporting a Nevada play that just might be the richest shale oil play in North America, maybe the world:

Nevada’s Chainman play offers great untapped potential in terms of conventional and unconventional resources, say industry veterans who’ve studied the play in the past few decades.

In March, SAM Oil will test the potential of a conventional prospect in the Pluto 27-1 re-entry prospect, an anticlinal trap with migrated hydrocarbons into sand and fractured shale reservoirs.

Originally drilled in 2007 by Plains Exploration & Production near the copper mining town of Ely in northeast Nevada, SAM redrilled the well last fall. In its test, SAM is targeting an anticline structure with an estimated 50 to 89 million barrels of oil recoverable, SAM manager Allen Matzke told Rigzone.

The Chainman shale is considered to be possibly not only richest oil shale in North America, but worldwide, said Charles Laser, an oil and gas consultant and wildcatter with nearly 40 years of experience.

“The Chainman is superior to the Bakken or Eagle Ford due to the fact is a secondary, tectonically, naturally fractured shale with excellent total organic carbon (TOC), allowing for much large reserves and higher flow rates.”

Nevada has not seen the level of oil and gas activity as that of Texas or North Dakota.

Oil and gas drilling has taken place in the Eastern Great Basin, which encompasses eastern Nevada and western Utah, since the late 1800s in Utah, according to a 2007 study by the U.S. Geological Survey (USGS).

The first commercial oil production in Nevada started in 1954 with Shell Oil’s completion of the #1-35 Eagle Springs, the discovery well for the Eagle Springs field in Nye County, Nevada. From the early 1900s to Shell’s Eagle Springs well in 1954, roughly 90 exploration wells were drilled in the Eastern Great Basin.

“As the exploration industry became more established, popular exploration targets were large, surface exposed anticline structures,” according to the USGS report.

“Some of these structures had oil shows in prospective reservoirs, but no accumulations were found.” The Shell discovery resulted in a sharp increase in drilling for approximately three years, but drilling activity fell due to low oil prices. Four more drilling activity spikes inspired by new field discoveries occurred in 1961, 1965 to 1970, 1977 to 1981, and 1984 to 1988. “The correlation between the number of new oilfield discoveries and the number of wells or total footage drilled, however, is poor,” said USGS. 

Much more at the link. This article will likely be archived by the source.

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Update On Collateral Damage Being Caused In Latin America

Rigzone's John Kemp also has an update on the collateral damage being caused in Latin America.  This article will also likely be archived.

Three data points from the article:

• U.S. shale will continue to be the marginal supplier of crude to the global market and set benchmark prices. The only real question is what level of prices and production are needed to balance the market.
• The number of active land rigs has fallen sharply in OPEC members Ecuador (down by 46 percent) and Venezuela (21 percent) as well as non-OPEC Bolivia (60 percent), Colombia (18 percent) and Mexico (45 percent). The only country where there is no evidence of a slowdown in activity, so far, is Argentina, where the number of rigs operating has climbed steeply over the last three years and has remained stable in recent months. The Vaca Muerta shale in Argentina's Neuquen Basin is seen as one of the most promising shale plays outside the United States and has attracted strong interest from international oil companies.

• Deepwater and ultra-deepwater fields off the coasts of Latin America and Africa require major capital commitments which international oil companies are reluctant to make when their revenues have been slashed and they are under pressure to increase capital discipline to maintain dividend payouts to investors. Shale is proving such a disruptive force in the oil market because it has emerged in the middle of the cost curve rather than at the top. North American shale plays may be more expensive than conventional fields in the United States, Canada and around the Middle East Gulf. When the shakeout is completed, North American shale drillers will not be the only, and perhaps not even the main, losers. 

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Getting Ready For A Price Increase?

Reuters at Rigzone is reporting:

OPEC forecast on Monday that demand for its oil this year would be much higher than previously thought, as its strategy of letting prices fall to hurt other producers begins to take effect.

In a monthly report, the Organization of the Petroleum Exporting Countries (OPEC) forecast demand for its oil would average 29.21 million barrels per day (bpd) in 2015, up 430,000 bpd from its previous prediction.

That would raise demand for the group's crude to above the level seen last year, with OPEC's forecast for production growth outside the group slashed by a third due to a slowdown in the U.S. shale boom and lower oil investments globally.

"(Lower non-OPEC supply is) mainly due to announced capital expenditures cuts for 2015 on the part of international oil companies, as well as a decline in the number of active drilling rigs in the U.S. and Canada," it said.

It said non-OPEC supply would rise by only 850,000 bpd this year, down 420,000 bpd from last month's forecast.

Four (4) Wells Coming Off Confidential Tuesday -- All Go To DRL Status -- February 8, 2015

Coming off the confidential list Tuesday:

• 27550, drl, CLR, Steele Federal 3-24AH, Banks, no production data,
• 28365, drl, BR, CCU Pullman 6-8-7TFH, Corral Creek, no production data,
• 28544, drl, XTO, Schettler 14X-9A, Cedar Coulee, no production data,
• 28939, drl, XTO, Allen 21X-17A, Dollar Joe, no production data,

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At The Corner Of Software Street And Battery Boulevard

Earlier today there was a short blurb on Apple and Tesla. Now, a bit more on the relationship between Tesla and Apple. Very, very interesting, this intersection between Tesla and Apple. Macrumors is reporting:

Following last week's news of a mysterious Apple-leased vehicle roaming the streets of Northern California, an Apple employee has given some details to Business Insider, suggesting Apple is working on a project that will "give Tesla a run for its money."

According to the site's source, who was verified to be an Apple employee, Tesla employees are "jumping ship" and choosing to work at Apple because of this unidentified project.

Last week's pictures unveiled a van that appeared to have multiple cameras on the top, similar to the vehicles Google uses for mapping. Given the van's similarity to other mapping vehicles, rumors have suggested that it is likely for an unspecified mapping project. Apple has been working to improve Maps in recent months, and it's possible the company is working on a feature that would compete with Google Street View.

At the corner of Software Street and Battery Boulevard. 

Another Well To Watch -- February 9, 2015

Permitted today:

• 30685, loc, Petro-Hunt, USA 153-95-9C-4-3C, Charlson, 

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Tale Of Two Companies

Link:
The company had issued the securities in as many as five parts with the maturity period ranging from 5 years to 30 years. The 5-year $1.25 billion worth of bonds came with a yield of 1.55% while the $2 billion worth 30-year bonds had a yield of 3.4%. According to reports from Bloomberg, the yields were higher than the comparable Treasuries.

Link:
The world’s largest software maker sold notes in six parts, including $2.25 billion of 40-year obligations with a 4 percent coupon, according to data compiled by Bloomberg. Those bonds sold at a yield of 153 basis points more than 30-year Treasuries. The company increased its sale by 54 percent after marketing $7 billion of debt earlier in the day.

So, this year, on a annualized basis, Apple will pay out 0.034 on $2 billion = $68,0000,000.
Microsoft will pay 0.04 on $2.25 billion =  $90,000,000.

I guess.

North Dakota Getting Ready To Test CO2 EOR In North Dakota; The Super-Rich Don't LIke Paying Taxes Either -- February 9, 2015

Getting ready to test CO2 injection this summer in North Dakota. Bakken.com is reporting:

This summer, North Dakota’s Energy and Environmental Research Center (EERC) will test the technique of using carbon dioxide for advanced oil recovery on its first commercial oil well, reports The Bismarck Tribune.

This trial will be used to determine how much more oil and gas can be recovered by implementing the process.

...  the technology has been used in the past, but on an older well. However, he thinks that use of the process could begin much sooner and added that the EERC hopes to begin carbon dioxide testing on a well drilled within the past five years.
The project will begin by testing one well. The program hopes to expand and believes a multi-pad well site would be ideal for future trial runs. 

The Lignite Research Council, in partnership with EERC, suspects that coal-fired plants will be top providers of carbon in the near future as carbon emission reduction requirements are put into effect.

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No One Likes Paying Taxes; Some Can Afford To Move

Florida, Texas Are Nice This Time Of Year

The is AP reporting:

If you're a billionaire living in Connecticut, chances are the tax department is keeping an eye on you.

In a state home to some of the richest Americans, tax officials go to some lengths to keep them — or, more accurately, keep the billions of dollars in revenue their income taxes generate.

Connecticut tax officials track quarterly estimated payments of 100 high net-worth taxpayers and can tell when payments are down. Of that number, about a half-dozen taxpayers have an effect on revenue that's noticed in the legislature and Department of Revenue Services.

Two years ago, tax officials were alarmed that a super-rich hedge fund owner might leave and reduce the state's income tax revenue. They set up a meeting and urged the unidentified taxpayer to stay. The effort was partly successful, with the taxpayer leaving Connecticut but agreeing to keep the hedge fund here.

Yesterday I ran into an individual whose company recently relocated to Southlake, Texas (just up the road from where we live) from San Diego, California, specifically because of the state corporate taxes.

I track the states here.

Back on April 30, 2014, CT Mirror was reporting:

Plummeting tax receipts have ripped a nearly $300 million hole in the next state budget, leaving legislators and Gov. Dannel P. Malloy just one week to fix it, according to a new report Wednesday from fiscal analysts.

Meanwhile, proposed new spending for pre-kindergarten programs, the elderly and working poor, public colleges and universities, and for cities and towns hang in the balance – as do tax breaks for teachers and consumers and the potential expansion of legalized gambling in Connecticut.

New projections from the administration and the legislature’s nonpartisan Office of Fiscal Analysis also worsened the deficit in the first budget after the November election, pushing it close to $1.4 billion or 7.4 percent of annual operating costs.

Meanwhile, the $500 million-plus surplus Malloy touted just two months ago when he proposed a tax rebate has disintegrated to $43 million.

More recently, from the CT Post,

Unilateral cuts of nearly $50 million ordered by Gov. Dannel P. Malloy in November have resulted in a smaller projected deficit in the fiscal year that runs through June 30.

But there remains a lingering $31.6 million shortfall in the $20 billion budget.

Budget shortfalls of $59 million over the last month, including a $40 million shortfall in the Medicaid program due to federal reimbursement issues, have been offset by savings of $72.2 million in various state programming accounts, most importantly a $65 million reduction in debt service payments resulting from low interest rates.

One more reason why Janet Yellen is resistant to raising rates. 

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Prioritizing

There are only so many dollars; only so many hours in the day; only so many bureaucrats; only so many meteorologists -- it seems resources would have been better spent preparing for the winters we've been seeing the past several years and the one we're experiencing now than diverting all those resources to preparing for an ocean that is rising at the rate of 0.01 inch per decade, or whatever it is.

The mayor talks a good talk, saying he's going to keep the subways open no matter what. But CBSlocalBoston is reporting:

Gov. Charlie Baker is “frustrated” and “disappointed” with the MBTA as it struggled to maintain even a limited schedule during Monday’s snowstorm.
The MBTA announced that all rail service will be suspended beginning at 7pm Monday night due to the snow. Rail service will be suspended all day Tuesday while maintenance crews continue to clear snow and ice from tracks, the third rail and switches.

The snow is bad but the freezing weather and ice yet to come (at the end of the week) will be even worse. A lot of folks are going to be delayed (and some will completely miss) getting to the global warming meetings being held on college campuses throughout the greater Boston area this week and next.

Seven (7) New Permits -- February 9, 2015; Looks Like Whiting Has Some Huge "KOG Wells"

Updates

February 12, 2015: Some folks have noted the "huge" Whiting wells in Moccasin Creek, Dunn County. See comments. Yes, these are huge wells; I was hoping folks would notice. It will be interesting to compare long-term production of these Whiting wells compared with KOG wells (yes, these were originally KOG permits/wells bought by Whiting).  Whiting announced enhanced fracking / completions in the future some time ago. When they post the fracking data, I will post some examples (if I remember).

Original Post

Hints that Blackrock thinks that "Big Oil" has bottomed. Link here. Note the wording. See disclaimer. 

Active rigs:

	2/9/2015	02/09/2014	02/09/2013	02/09/2012	02/09/2011
Active Rigs	137	192	185	203	163

Well name changes perhaps due to slump in oil prices:

• CLR is now targeting the middle Bakken with two Cuskelly wells (#29708, #29710); they were targeting the second bench and the first bench of the Three Forks, respectively.

Seven (7) new permits:

• Operators: MRO (4), HRC (2), Petro-Hunt
• Fields: Reunion Bay (Mountrail), McGregory Buttes (Dunn), Charlson (McKenzie)
• Comments:

Four (4) producing wells completed:

• 25587, 3,465, Whiting, Moccasin Creek 14-33-28-4H, Moccasin, t1/15; cum --
• 25588, 2,750, Whiting, Moccasin Creek 14-33-28-4H3, Moccasin, t1/15; cum --
• 27360, 1,114, Emerald, Slugger 7-16-21H, Charbonneau, t12/14; cum 10K 12/14;
• 28301, 1,735, XTO, Omlid 41X-13G, Siverston, t1/15; cum --

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

Montana Bakken 101 -- Finding Your Well; This Is Really, Really Cool For Newbies -- Including Me

I don't follow Montana oil and gas industry to any extent, but readers always help me learn things.

Today, I learned how easy it is to track a Montana permit or well you might be interested in.

For example, if you know the operator and the API and the name of the well or any combination, go to this site:

http://bogc.dnrc.mt.gov/WebApps/DataMiner/Wells/Wells.aspx

Then, click on the drop-down menu at the far left (the default is API #). Perhaps easiest is to click on the operator. I seldom know the API.

Go down the list, find the well you are interested in, click on it, and voilà, there you have it, a 3 x 5 index card with the status of the well.

And this is really, really cool! It looks like you can download well file reports in Montana without a paid subscription like one needs in North Dakota. Wow! 

Filloon On Possible Tax Breaks For Bakken Operators -- February 9, 2015; Dallas May Have Led Nation In Job Growth In 2014

Link here at Seeking Alpha:

• A North Dakota tax trigger implemented in 1987 may save Bakken operators $1B in 2015 production taxes.
• If the tax break is triggered, North Dakota's production tax rate falls from 11.5% to 5% for 5 months regardless of the price of oil.
• Back in April, the North Dakota legislature voted down a flat tax that would have replaced the current triggers. 

Filloon writes:

History dictates that oil revenues will fluctuate greatly, so taxation needs to be a variable that does not. North Dakota production tax rates are high when compared to other states, which has not deterred development nor do we believe it will. If we look at 2013 production tax rates, we see a wide variance:

Wyoming:  11.7%
North Dakota: 11.5%
Montana: 7.6%
New Mexico: 6.9%
Colorado: 6.8%
Texas: 6.7%
Oklahoma: 3.3%

North Dakota's best acreage is some of the best in the country and provides exceptional IRRs.

So, the percent may not be as much of an issue as triggers built into the current system. Currently, North Dakota has an oil extraction tax of 6.5% and gross production tax of 5%.

The extraction tax has a built-in tax break if oil drops below an inflation adjusted limit set at $55.09/bbl. for 2015. If the realized price of WTI is below that number for 5 consecutive months, then the 6.5% tax is dropped for the first 24 months of the well's life. After the 24 months are up, the tax is reinstated, but at a 4% rate for the well's life, not 6.5%. Keep in mind, a well will produce for 35 to 40 years, so the effective tax break would cover that period of time.

The 5% gross production tax is not affected, and will continue throughout the period regardless of oil price.

This tax trigger may not be relevant today, as it was implemented in 1987 after the last oil boom went bust. Legislators had hoped that this tax reduction would bring vertical development back to the state. At the time, this mattered little as oil prices and technology didn't provide the economics needed. This law was also predicated on vertical production, which is relatively consistent throughout well life, where current horizontally fracked wells produce 19% of total resource in the first year. Half of all production occurs in the first 5 years, so we essentially provide a break on more resource than the trigger had initially envisioned. So, this front heavy production is hit especially hard by the tax break. Also, crude prices generally crash quickly and recover long before 24 months are up, so North Dakota's break reaches too far into the future. To provide an idea of what this trigger could save Bakken operators, I have provided data below on a per well basis.

Much more at the link.

With Citi's recent analysis, the trigger will be pulled -- it's just a matter of time ...

The recent surge in oil prices is just a "head-fake," and oil as cheap as $20 a barrel may soon be on the way, Citigroup said in a report on Monday as it lowered its forecast for crude. 

Despite global declines in spending that have driven up oil prices in recent weeks, oil production in the U.S. is still rising, wrote Edward Morse, Citigroup's global head of commodity research. Brazil and Russia are pumping oil at record levels, and Saudi Arabia, Iraq and Iran have been fighting to maintain their market share by cutting prices to Asia. The market is oversupplied, and storage tanks are topping out.

If oil goes to $20/bbl on supply and demand fundamentals, car companies and airlines are going to do very, very well. Can hardly wait.

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World's Largest Theme Park To Be Built In Ft Worth, Texas

 Link here.

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Dallas May Have Led Nation In Annual Job Growth 

Dallas News is reporting:

Texas added more jobs in 2014 than any other year in history despite declining oil prices for half of the year — but the picture may not be as rosy in the months to come as the effects of oil-related layoffs hit home.

The state gained 457,900 jobs in 2014, which translates to a healthy annual job growth rate of 4 percent, according to data released Friday by the Texas Workforce Commission. The state’s job growth rate in 2013 was 2.9 percent.

Texas probably led the nation in job creation in 2014, but the state-by-state data needed to make comparisons won’t be released by the federal government until Tuesday.

I heard from a local individual that he had seen the data and yes, indeed, Dallas led the nation in job creation last year. So, hearsay now; we'll know more later this week.

How 93-Year-Old Williston Men Spend Their Weekends -- February 9, 2015

I interrupted my blogging for awhile earlier this morning to give my dad a call. My notes regarding the call:

I just spoke with my dad; chipper as ever. 

Celebrated his 94th birthday over the weekend; he says he couldn't keep up with all the cards and letters he got. I told him he needs to write back to all those folks and tell them to put a dollar bill in each of the cards next year. LOL. He said they would probably put in two dollars.

Still going into work every day. When I call the office, I always call the front desk and ask if Carl is in. If he is, they always say, "I'll check for you. I don't know if he's in yet." He's "trained" them to say that -- they have to walk all the way back to his office in the back to see if he wants to talk to whoever is calling. LOL.

Sometimes they say "he is too busy to talk right now." But he always takes my calls. LOL. 94 years old and "too busy to talk right now."

I think he spends most of his time figuring out what he would do if he wins the $450 million Powerball. 

Update: I "mis-remembered." He is "only" 93 years old this weekend. I guess it only feels like hearing his stories about Newell, South Dakota, for 94 years. LOL. 

[Some of my fondest memories are of visiting Newell, SD, when I was growing up in Williston, and then camping in the Black Hills. My dad loved seeing the kids have fun. I remember him driving me to the highest point in the Hills that he could drive the car, and then let me ride my bike at full speed down the "mountain." I must have been about nears old at the time. Twenty-five years later I watched our older daughter ski down at break-neck speed in the Austrian Alps and remembered that bike ride.]

The Motor-sickle Song, Arlo Guthrie

Monday, Part 3 -- February 9, 2015; 14/16 Bakken Wells Go To DRL Status

Initial production numbers for wells coming off the confidential list over the weekend/today have been posted; 14/16 Bakken wells go to DRL status (wells that reached total depth but are not yet fracked); OXY USA has another ... well, OXY USA well. 

Headlines without links:

• OPEC: "overflowing" oil supply is weighing on prices. 
• the oil "fear index" is at crisis levels
• the break-up? stocks, crude oil may call it quits
• Greece says restructuring debt, cutting surplus are non-negotiable
• "global warming" biggest science scandal ever
• official records systematically 'adjusted' to show global warming
• meteorologist ("I would like to buy a vowel"): 'in the business world, people go to jail for such manipulations of data'
• fierce Kennedy cold front slams New England, NY
•  Kanye West storms on stage; rants about Beck's surprise album of the year

Part 3 will have to wait. I'm down to very little battery power, and no charging cable with me.

For those of you who still have power, consider a look at this Oil Drum article, dated September 10, 2013. I will come back to it later.

On Saturday I mentioned that the NDIC mandated that Bakken crude oil be conditioned/reformulated to less than 14 psi (at almost a pound less than the Obama standard). A reader reminded me of a Reuters article we had posted some time ago, suggesting that conditioned/reformulated Bakken crude oil might meet the criteria necessary for export. The last paragraph in that story:

Quantum Energy Inc, a U.S. energy venture, said on Friday it plans to build a network of stabilizers and refining equipment that would produce fuel fit for export from North Dakota's Bakken oil patch, which churns out light crudes. 

If one searches the blog, one will find other stories on Quantum Energy in the Bakken. 

Monday, Part 2, -- February 9, 2015; Tesla Hires More Employees From Apple Than Any Other Company

Wow, that makes me feel better -- the market is down 100 points but according to Yahoo!Finance the market is reacting to Greece's insanity, not to the fact that Germany and France are on the brink of war with Russia over the Ukraine. Yes, that's a relief. Drudge, last night, certainly implied we were on the brink of war.

I think I saw somewhere that oil was rising again. I mentioned to someone over the weekend, oil prices can rise just as fast as they fell -- and sometimes faster.

Some interesting headlines -- WARNING! WARNING! SPOILER ALERT! -- This is NOT an investment site. See disclaimer -- as I was saying, there are some interesting headlines coming out of Apple. For starters:

• Apple may release a faster new MacBook Air this month
• Apple said to hire banks for first sale of Swiss Franc bonds
• Apple plans debut Swiss Franc bond sale

I'm holding out for Apple Greek bonds -- LOL.

For those who don't know, the MacBook Air is the laptop that is a) thinner than a sheet of paper; and b) faster than a speeding bullet because a) it has no hard drive; and, b) it has no fans. My wife has one of the early versions of the MacBook Air (I use the MacBook Pro). It is incredible how fast her Air is compared to my laptop. Amazing. I can't imagine it being faster.

But for me, the big story is the "Apple-Swiss-franc-bonds' story. Didn't the Swiss just "unpeg" their franc from the Euro? Yup. This tells me Tim Cook is reading The Economist.

On a completely different note, this was the first independent ad-free blog that predicted that Netanyahu would not shop in Washington (which reminds me, Lyin' Brian won't be showing up for his scheduled Letterman visit later this week) as planned -- yeah, I see the typo, "shop in Washington." Freudian. Actually that was not a typo. Netanyahu would have been going shopping: shopping for political support and shopping for military hardware, though the Israelis are pretty good at building their own. Actually, I think they are really, really good at modifying the F-16s they get from the US. Anyway, now this from the AP: Israeli leader faces pressure to cancel US Congress speech. An article last week suggested he might not come: his minders and press secretary whining that they were not aware that the DEMS in Congress did not like Mr Boehner. Hello! Spoiler Alert! No one likes Mr Boehner.

As long as we're not keeping to any theme this morning, let's take a look at this headline from BloombergBusiness: Mercedes Sets January U.S. Sales Record Adding Entry-Lux Buyers:

Mercedes-Benz, the top-selling luxury-auto brand in the U.S. in 2013, started out this year in the lead with record January sales as carmakers broaden their lineups to bring in younger buyers.

The Daimler AG unit sold 22,604 vehicles last month, 103 more than a year earlier, led by the new entry-level CLA car, according to a statement yesterday. Bayerische Motoren Werke AG’s BMW, surpassed by Mercedes in 2013, reported an 11 percent gain to 18,253.

Mercedes and BMW are among luxury-auto makers expanding with lower-cost models. Sales of entry-level cars and SUVs represent 67 percent of the U.S. luxury market and probably will keep growing this year, Bloomberg Industries forecasts.

Mercedes will benefit from a full year of its CLA, which starts at $29,900, a refreshed C-Class and a new GLA small sport-utility vehicle, while BMW is introducing a $33,025 2-Series coupe. 

I think our 2012 Honda Civic, base model with no extras, was $24,000, or thereabouts. A CLA at $29,000. I remember my boss getting excited with her new "Baby Benz" (C230?) back in the late 80's or 90's when we were stationed in Germany.

As good as Mercedes is, the story over at Audi, apparently, is even better. Reuters reports that Audi beat Mercedes with record January sales.

For the record, in January:

• Tesla: #1 in deliveries in US -- an estimate
• Volt: Chevrolet Volt Sales Plunge In January 2015 To Just 542 Units – Thanks Next Gen!; Volt has worst sales month since August, 2011; Nissan Leaf also down. 
• Leaf: Nissan Leaf Sales fall in January for first time in 2 years in US
• Prius: "on par with last year's results" -- in other words,  no growth despite a huge January for Toyota

But the EV folks never give up:

During the month, only Tesla and Nissan remained in “4 digits” for sales as the seasonal pullback (due to weather/tax implications of the $7,500 credit) and pressure from future EV offerings pushed the results lower compared to December.

Overall, an estimated 5,924 plug-ins were bought in January, as compared to the 5,550 sold a year ago. And while this is not a significant increase (6.7%) overall, and is certainly trailing the 23% improvement in 2014, this month’s [EV sales] number can only be considered a success.

"...this month's EV sales number can only be considered a success..." must have been written by the Agore/Brian Williams team.

We saw a Volt this morning, on the way to Starbucks, here in the DFW metroplex. Looked really, really nice. I understand they are really, really responsive and really, really fun to drive. I have nothing against EVs; it's the myth that coal-burning cars are better for the environment than oil-burning cars that bothers me. By the way, have we ever seen a story of a Hollywood celebrity getting into a big accident while driving an EV and being chased by Papa Razzi? I can't recall.

Oh, that reminds me. This is a big story. I've talked about this often but generally not connecting the dots. The dots were connected over the weekend. The dots: a) Apple's biggest challenge is the "battery issue; b) Tesla is a battery company disguised as an automobile company.

Connecting those two dots, I saw this story in Bloomberg Businessweek over the weekend:

Doug Field never considered leaving Apple. From the summer of 2008 to the fall of 2013, Field, a former chief technology officer for Segway and development engineer for Ford, oversaw product and hardware design, working on the MacBook Air, MacBook Pro, and the iMac. He earned a generous salary and was excited by the work. Then Elon Musk and Tesla Motors came calling, and Field agreed to become vice president of its vehicle program.

In the October 2013 announcement of his hiring, Field said joining Tesla was “an opportunity for me and many others to pursue the dream of building the best cars in the world—while being part of one of the most innovative companies in Silicon Valley.”

He likely won’t be the last Apple executive poached by Tesla. The company has hired at least 150 former Apple employees, more than from any other company, even carmakers.

The former Apple staffers work in many areas of the 6,000-employee automaker, including engineering and law. “From a design philosophy, [Apple] is relatively closely aligned,” says Musk, Tesla’s co-founder and chief executive officer. Apple declined to comment for this story.

Google tesla apple. One can lead horses to water but can't make them drink. See disclaimer. 

Of course, I have the story exactly backwards. But that's fine.

Monday -- February 9, 2015; Actual Unemployment Rate EXACTLY Double The Officially Reported 5.7 Percent -- CNBC On The Fed

Active rigs:

	2/9/2015	02/09/2014	02/09/2013	02/09/2012	02/09/2011
Active Rigs	135	192	185	203	163

Note to  readers: I got a lot of e-mail from readers yesterday afternoon / last night. I was tied up with family activities but I will eventually get to all  the e-mail.

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RBN Energy: Getting Better all the Time – Productivity Improvements, Crude Production and Moore’s Law

If you work for a producer or oil field services company, you might have a bit of an issue with that title.  But just for a moment, put your worries aside and consider the silver lining – huge improvements in our industry’s productivity over the last few years.  Things are getting better and better.  In fact that is part of the problem.  Producers have just become too productive for their own good. We’ve seen the consequences of this kind of productivity improvement before, not in the energy industry, but in electronics.  Moore’s law, remember?  In today’s posting we’ll look at some of the evidence of huge productivity improvements, what it has meant for production volumes, and the implications for U.S. producers now facing many of the same issues that electronics companies have dealt with for decades.

Anyone following the production profiles of recent Bakken wells that I've posted can only be amazed how incredible some of these wells are.

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Job Watch: The Fed Agrees -- The Job Numbers Aren't That Rosy

CNBC is asking the question, "why is the Fed easing again":

In the course of December and January, the balance sheet of the U.S. Federal Reserve (Fed) expanded by $186.7 billion to a total of $4.02 trillion. That policy reversal came after an impressive $244.6 billion liquidity withdrawal between August and November of last year.

What lies behind this important policy change?

Drum roll. This is why ...

....the actual unemployment rate (taking into account involuntary part-time workers and people who dropped out of the labor force because they were unable to find a job) is exactly double the officially reported 5.7 percent. On top of that, no progress was noted on the number of the long-term unemployed; at 2.8 million they still represent almost one-third of the jobless total.

That is a large labor market slack. With subdued wages and prices, it is no wonder why employment creation has become a major concern in the exercise of the Fed's policy mandate.

A broader issue for the Fed is what the current employment picture holds for the medium-term growth outlook of the U.S. economy.
That's where jobs and incomes, along with low credit costs, play a key role. Looking at the latest GDP numbers, the Fed may find some reasons to worry. 

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Another Kennedy Cold Front Later This Week

Another polar plunge to hit New England at the end of the week. This follows the current snowstorm hitting Massachusetts today. Schools in Boston will be close (again) today and tomorrow. AccuWeather is reporting:

While the short term forecast calls for over a foot of snow in parts of the Northeast, a widespread chill will take hold of the region late in the week.

A blast of arctic air will deliver the coldest weather so far this winter to the Northeast with widespread highs in the teens and single digits.