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.

Frack Sand CEO: Oil Companies Cannot Drill Themselves Out Of This Depression -- March 28, 2015

FuelFix is reporting:
The message that a scientific approach should trump the all-out wildcatting of the fading shale boom is echoing through more corridors of the energy industry. 
But oil producers may not want to hear it. Frac sand suppliers say U.S. oil producers should use the lull in drilling as a chance to step back and study mountains of oil field data to see which blends of water, sand and chemicals are best for blasting open shale rock, a process called hydraulic fracturing.
Rapid-fire drilling – a practice that shale producers used during the boom to keep output rising over natural well depletion – often yielded bad, unproductive wells, as does hasty hydraulic fracturing, they say.
“There’s a high failure rate because we don’t do our homework,” said Jim Venditto, vice president of technical services at Trican Well Service, a fracturing firm that coats sand in material that makes it more buoyant and easier to pump into a well.
He said producers have been talking more about finding ways to bolster well productivity, even as they send hundreds of drilling rigs to the sidelines. “You’re not going to be able to drill your way out of this,” Venditto said. “Every so often we have to reinvent the oil industry again.”

On XTO's Request For A Waiver On Flaring, How Would You Vote -- March 28, 2015

I haven't read the article(s) yet, but I assume they are similar; in fact they might be identical:
In case the links are broken, I believe the articles have to do with a request by XTO (XOM) for a waiver for 140 wells on the reservation with regard to flaring.  This comes at a time when there is considerable pressure on the Bakken due to a slump in oil prices and many operators in the Bakken (and perhaps across the country) are in survival mode. They need all the help they can get.

I decided to quit doing polls some time ago -- took too much time and effort -- but this one was too good to pass up.

In the past, I did not say how I would vote before the poll was closed, and sometimes I never said how I would vote even after the poll closed.

On this question, an exception: I would vote no.

I have a number of things to do so I won't take time to explain my reasoning but if the spirit moves me I might explain my reasoning later.

Overheard In Starbucks Saturday Morning -- March 28, 2015

If in fact it can be proved that Hillary Clinton wiped her server clean AFTER the subpoena that would be obstruction of justice. See post from yesterday. It it obvious Ms Clinton would not know how to wipe a server clean; someone would have had to help. Conspiracy to obstruct justice.

Mideast in free fall. It will be interesting to see if historians compare the fall of Yemen to the assassination of Archduke Ferdinand. The Egyptians join the fray. By the way, did anyone follow the news this past week regarding the Shi-ite/Shia/Iraqi/Irani joint task force trying to re-take Tikrit back from ISIS? The US refused to let the Irani-backed Shi-ites to take part in the joint task force to re-take Tikrit if the task force wanted the US to bomb ISIS. Here's the WSJ story. Confusing, huh? And, yes, meanwhile back in Washington and Switzerland, the US is working as hard as it can to become Iran's best friend.

An inconvenient truth for ObamaCare. ObamaCare death spiral begins. Best advice: Supreme Court needs to rule in favor of the Federal government / President Obama -- when ObamaCare fails it needs to fail under its own weight. Folks are starting to see that ObamaCare is nothing but high-cost catastrophic insurance for the healthy; and a godsend for the relatively few with financially devastating pre-existing medical conditions. It would have been less expensive to simply have the government pick up the full tab for the latter.

Week 12: March 22, 2015 -- March 28, 2015

Top story for the past week is still the slump in oil prices and the falling number of active rigs in North Dakota, now down to 97. We went below 100 active rigs on March 25, 2015.  We  hit the century mark one day earlier.

Sweet spots in the Bakken still profitable 
11,000 bbls in 5 days -- one well

Slump in oil prices
How US frackers plan to beat OPEC
Update on Cushing's reversals of fortune
Halliburton closing its Minot shop
Saudi Arabia to increase number of its wells substantially

New federal fracking rules; North Dakota's exposure
Obama says it is safe to frack: just practice safe fracking

Slowdown worse than expected

Starting to turn the corner

Bakken economy
Williams County: fastest growing county in the US
Second casino planned in Williston area
North Dakota #1 in US in restaurant sales gains for past year

Whiting to offer 35 million more shares; issue $1.75 billion in debt
Owner of more than 15 million mineral acres across US to file for IPO