Bloomberg, Sierra Club -- War On Coal -- April 8, 2015

Disclaimer: 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.

The Huffington Post is reporting:

The Sierra Club and Michael Bloomberg are upping the ante in their effort to close down coal-fired power plants, announcing on Wednesday another $60 million in funding for their anti-coal campaign. The Sierra Club is also raising its target for coal plant closures, setting a goal to close half of all coal plants in the U.S. by 2017.

The group’s previous goal, set in 2011, was to close a third of coal plants by 2020. So far, the organizers have claimed victory on 187 plants, all of which have closed or are slated for closure in the near future. If successful, the Sierra Club wants to see 166,000 megawatts of coal-fired power shut down or slated for closure in the U.S. in the next two years. Coal plants are responsible for about 40 percent of U.S. greenhouse gas emissions, which scientists have found are causing climate change.

Bloomberg, the former mayor of New York whose philanthropy donated $50 million to Sierra Club's anti-coal work in 2011, announced another $30 million in support for the campaign on Wednesday. About a dozen additional donors such as the Hewlett Foundation, the John D. and Catherine T. MacArthur Foundation and the Grantham Foundation have pledged another $30 million to the effort. 

All good news for natural gas investors.

Solar energy accounted for zero percent of US energy consumption in 2014. 

COP On The Bakken -- Seeking Alpha -- April 8, 2015

Just a sample from the Seeking Alpha article:

So that concludes our section on the Eagle Ford we still have the best position in the play and we're certainly one of the most effective operators in the play. And those same characteristics apply to our Bakken position we are in the highest value part of the play in the Bakken top on the Nesson Anticline. We're developing the Bakken at the moment on 320 acre spacing in the Middle Bakken and Upper Three Forks which results in 160 acre combined spacing we just have most of the operators in the Bakken talk about their spacing.

Now like the Eagle Ford we have a lot of capital flexibility in the Bakken and we're exercising that flexibility we're going drop down to an average of five operated rigs this year. In fact we'll get as a low as three operated rigs by the middle of the year. And then we'll ramp-up to 10 rigs by 2017 and that results in 20% increase in Bakken production between 2014 and 2017. And that level of capital activity with our 600 million barrel resource base we've got at least 10 years of drilling inventory to continue development of the Bakken.

And like the Eagle Ford we're continuing to focus on capital efficiency. And in fact since 2011 we've dropped our well costs drilling costs by 40% and our unit completion cost by 50%. And we're still on that learning curve as you can see on the right hand side here. And one of the reasons that we’re continuing to see this learning curve and cost benefit is because most of our wells now are drilled from multi-well pads. In fact in 2015 90% of our wells will be drilled from multi-well pads.

And then continuing:

So I think you can see from Matt is just showing that we’re continuing to deliver cost efficiencies in the Bakken as well. But we're not stopping there with just the cost efficiencies we're also continuing to work on the science the technical side with our unconventional reservoir models to continue to enhance those and our field pilot testing. So I'm going to talk about that a little bit next.

As Matt mentioned as shown on the left hand side of the different well configurations if you look at our Middle Bakken and our Upper Three Forks development together on a combined basis we're on 160 acre spacing. But our reservoir models are telling us that they'd be a benefit to go to tighter spacing. So it is what we expect from our models. And so we're testing that now we actually have different pilot tests looking at different spacings those are shown by the five red dots on the map each of those tests. Looking at different spacings to test what our models are telling us we don’t have definitive results yet from those tests so we are continuing to drill our 160 acre spacing until we have that.

Another kind of pilot testing that we're doing is looking at developing the Middle Three Forks that lowest zone in separately. So we have two pilots shown by the grey dots here on the map that are testing independent development of the Middle Three Forks. Now we also have in the Middle Three Forks a single well that we drilled earlier that we've got some early results from that are pretty promising. So I will show you those next this was a well that was drilled near the crest of the Nesson Anticline and you’d see the results in the graphic on the middle. In this case our Middle Three Forks production actually is quite similar to typical Upper Three Forks production that we've been getting on our acreage. So that’s a real potential resource upside for us if we can make this work over a broader area so these pilots are starting to look at how broader an area can we get these kind of results out of the Middle Three Forks. And ultimately that will allow us to evaluate a multi-layer development of this area along the lines of what you see on the left hand side in terms of the well configuration.

This article will be archived at the source in the not-too-distant future.

This was Bloomberg's take on the presentation: COP bets the farm on shale. 

ConocoPhillips, one of the world’s largest shale producers, sees crude prices rising by the end of the year, bolstering the company’s growing wager on U.S. oil. Chief Executive Officer Ryan Lance is staking a big part of the company’s future on shale, pledging to spend 50 percent more over the next three years primarily in the U.S. and Canada even as crude prices fell by more than half.

ConocoPhillips joins Exxon Mobil Corp. in making wells from Texas to North Dakota a central focus as oil companies adapt to market conditions that require the ability to ramp up or cut back drilling swiftly.

Relying on flexible, low-cost opportunities that can stop and start on a dime will be critical as U.S. drillers become the world’s swing suppliers, Lance said Wednesday in an interview at Bloomberg’s headquarters office in New York.

“This is my fifth rodeo,” Lance said of his previous experience with energy downturns. “We’re going into a world that’s going to be characterized by lower, gradually rising prices and a lot of volatility.”

The shift for ConocoPhillips away from billion-dollar projects that take years or decades to complete is rooted in a belief that crude prices could gyrate wildly for years to come. Any price recovery in the near term will be modest, he said, as slowing U.S. production helps push up prices to between $70 and $80 a barrel within three years.

In the Bakken, COP operates as Burlington Resources. 

Talking About Re-Fracks -- Filloon On Whiting -- April 8, 20

Regular readers know my interest and inappropriate exuberance with regard to refracking the early wells in the Bakken. We're starting to see others talk about the potential.

Michael Filloon over at Seeking Alpha:

• Whiting's refrac inventory in Sanish Field is significant and could provide excellent economics using newer completion techniques
• if refracced, Brehm 13-7H may payback as soon as 6 months at a realized oil price of $50/bbl;
• in just the Sanish Field, Whiting's refrac inventory could be as high as 313 wells
• results could be even better if we use EOG's current wells results as a guide 

This is an incredible article. I might come back to it later. I can almost guarantee this article will be available by subscription in the not-too-distant future. 

Down To 91 Active Rigs In North Dakota -- April 8, 2015

Active rigs:

	4/8/2015	04/08/2014	04/08/2013	04/08/2012	04/08/2011
Active Rigs	91	191	185	208	173

Three (3) new permits --

• Operator: Hess
• Field: Robinson Lake (Mountrail)
• Comments:

Wells coming off the confidential list Thursday:

• 26387, drl, BR, CCU North Coast 31-25MBH, Corral Creek, no production data,
• 26934, drl, CLR, Kuhn 6-13H1, Camp, no production data,
• 28949, 653, Samson Resources, Ness 3229-6H, Blooming Prairie, t2/15; cum 3K 2/15;
• 29032, 557, Samson Resources, Odyssey 0508-6H, Blooming Prairie, t2/15; cum 3K 2/15;
• 29154, drl, XTO, Hanson 11X-12B, Murphy Creek, no production data,
• 29280, drl, MBI, Bahley 31-1, Wildcat, no production data,
• 29440, SI/IA, Murex, Johan Stephen 13-24H, Temple, no production data,
• 29488, drl, Statoil, Charlie Sorenson 17-8 7TFH, Alger, no production data,

Three (3) Slawson permits canceled: permits for three Slawson Phalanx Federal wells in McKenzie County were canceled.

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Alive And Well?

With only 91 active rigs in North Dakota, one might wonder about the credibility of the analyst. Bakken.com is reporting that the Bakken and the Niobrara are both alive and well:

The Bakken and Niobrara Shale formations are alive and well, for the most part. At last week’s DUG Bakken and Niobrara conference, analysts were present to talk with industry leaders.

Market analysts at the conference agree that operators are remaining optimistic about shifting focus to the formations’ core acreage and break-even costs remain on the upper end of $40 per barrel price range.

On the flip side, they found less optimism surrounding the formations’ natural gas market. After speaking with midstream companies and consultants, it became apparent that the market demand for natural gas has declined due to project permitting delays in the Gulf Coast region, especially for petrochemical projects.

Permitting delays affecting projects in the Gulf Coast have become a major roadblock for projects that could increase the demand for natural gas. Midstream representatives told the analysts that without these various projects moving forward, the demand growth for 2016 will likely be impacted. Additionally, approval for new Gulf Coast storage facilities can take as long as 18 months compared to the three-week permitting process found in North Dakota.

Another key takeaway from the conference was the break-even prices for both the Williston and Denver-Julesberg Basins. After speaking with management teams from four oil and gas companies, [the analysts] found that companies were operating with full-cycle costs that would break even with barrel of oil equivalent prices between $44 and $53. In both shale plays, the two found that many operators were drilling across larger areas of their acreage.

As operators continue to shift focus onto the play’s core acreage, though, many have seen a 10 to 20 percent reduction in break-even costs. For the coming year, many companies are moving away from the more costly, less productive areas to focus on their most promising acreage.

The core areas of the Bakken and Niobrara formations also have existing midstream and water transport infrastructure installed, further reducing the costs for companies to focus on these pay zones. By shifting focus to these core areas, companies will be able to further reduce the year-end finding and development costs while also reducing the break-even costs. By utilizing infrastructure already in place, operators could potentially lower their operating expenses by $2 to $3 per barrel of oil equivalent for the upcoming year.

There is more at the linked article.

Mercedes Sets High Bar For Rivals Audi, BMW In The Race For The Top Premium Brand -- April 8, 2015

Disclaimer: this is not an investment site. Do not make any investment or financial or car-buying decisions based on anything you read here or think you may have read here.

MarketWatch is reporting:

Mercedes-Benz sold nearly 15% more cars in the first quarter from the same period last year, setting the bar high for rivals Audi and BMW in the race for the top premium brand, amid strong demand for its C-Class sedans, sport-utility vehicles and luxury compact cars.

The German the luxury car maker owned by Daimler AG, said on Wednesday that it sold 429,602 cars in the quarter. Mercedes-Benz's sales growth accelerated in March when it sold nearly 16% more vehicles than in the same month last year.

Now, let's go back to that article on EV sales in March. Mercedes B-Class Electric was #10 on the list, having sold 145 of those EVs in March, 2015, compared with 0 in March, 2014 (obviously a new model). Sales of the Mercedes B-Class Electric, year-to-date: #9 on the list with 494 sold.

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Surprise! Surprise!

Marathon bomber found guilty. 

565 comments so far.

Boston citizens stereotypically against the death penalty. I wonder if Pocahontas will weigh in; she's a legal scholar. My hunch is she won't touch this one with a 10-foot pole.

Jury decided in less time than an Apple Watch needs re-charging.

I like the "death penalty with no chance of parole and no chance of actually being put to death by society." Inmates facing a death penalty -- whether it happens or not -- are subject to different rules in prison than "life without chance of parole." 

The Red Queen Is Still On The Treadmill -- April 8, 2015

Reuters is reporting:

Oil futures fell sharply on Wednesday after government data showed the largest weekly increase in U.S. crude inventories since 2001 and a day after Saudi Arabia reported record production in March.  [Russia also reported record production.]

U.S. crude oil inventories surged 10.95 million barrels to a record 482.39 million in the week to April 3, the Energy Information Administration (EIA) said in its weekly report. 

A Reuters survey of analysts had yielded a forecast for a build of 3.4 million barrels.

With US, Russia, and Saudi Arabia all reporting record production, one has to ask the question: where is it all going? Storage? Actually, the better question: when is the Red Queen going to fall off the treadmill? Whatever happened to Peak Oil?

NIMBY -- April 8, 2015

Best quote in the linked article below:

“I was generally in favor of wind power and probably still am,” Gladstone resident Marv Krank said during the meeting. “But not at this location.” 

The Dickinson Press is reporting:

A group of concerned residents packed into a Stark County Courthouse conference room Tuesday morning in Dickinson to express their disapproval of a proposed wind energy project. The emotional reactions from residents were a result of a proposal from Dickinson Wind LLC, a subsidiary of NextEra Energy Resources LLC of Connecticut, which has requested the Stark County Commission to approve 87 wind turbines that would stretch across Interstate 94 from Gladstone to Richardton.

Krank said he has spent weeks traveling to various wind towers throughout the state. He believes the noise levels towers generate have become a major concern.

“Noise is definitely a problem,” he said. “You can hear the whooshing sound of propellers from several thousand feet away.”

But even more troubling than noise levels, Krank said, was the decrease in land value as a result of wind farms.

“I have been to some of these sites,” he said. “There is zero development in these places. Windows are boarded up at some farms. Community growth has stopped. It looks to me like people do not want to live under the shadow of a wind farm.”

Like Krank, I like wind power but I like wind power as long as it's not in the United States. Maybe Hawaii is okay. Next to the proposed Obama Presidential Library.

Regular readers know that Connecticut is the only state in the union that has banned commercial wind farms and that's why they are coming to states like North Dakota. 

In Over Its Head -- Time To Privatize Mail Service In The Bakken -- April 8, 2015

The Dickinson Press is reporting:

A new audit shows the U.S. Postal Service in North Dakota rarely met national service standards in recent years, and high employee turnover contributed to delayed mail delivery and excessive customer wait times. The audit by the Office of Inspector General concludes that while the Postal Service has taken action in response to the Bakken oil boom, more improvements need to be made to improve employee retention and customer service. Some findings from the audit: 

• North Dakota had a 165 percent increase in package deliveries from 2010-2014, compared with the national average of 21 percent
• the number of delivery points increased 14 percent, compared with 1 percent nationwide
• delivery staff were overworked, with rural carrier overtime increasing 241 percent between fiscal years 2011 and 2014. Nationally, overtime increased 105 percent
• mail carriers in the Bakken returned from their routes after 5 p.m. as often as 56 percent of the time in fiscal years 2012 and 2013. This improved in 2014, dropping as low as 23 percent
• while much of the audit focused on western North Dakota, it also recommends improvements to mail processing in Fargo and Bismarck and noted that the Fargo Prairiewood Station had the most instances of excessive wait times.

The subject line for this post is (somewhat) in jest.

But, if you are sending a package to the Bakken, use some carrier other than USPS. 

The Bakken Isn't Going Away -- April 8, 2015; Wow! Look At This EV Headline

From Seeking Alpha:

ConocoPhillips bets on shale in major U.S. spending shift • 12:26 PM

Carl Surran, SA News Editor

ConocoPhillips says it plans to spend 50% more over the next three years in the U.S. and Canada - ~$11.5B/year - steering more funds to projects from Texas to North Dakota as spending winds down on major developments in locations such as Australia. The spending plan amounts to a vote of confidence in the future of North American oil, and COP’s operating costs - among the lowest in North America - allow the company to pursue such a strategy.

COP also sets a target of boosting production by 6.3% to 1.7M bbl/day by 2017.

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Wow! Look At This Headline

CleanTechnia is reporting: US Electric Car Sales: No Surprises. Tesla Model S, Nissan LEAF, & BMW i3 On Top Again.

After reading that headline, one gets the feeling EVs are setting the world on fire (recall "Chariots on Fire?" -- brings back memories), almost making me want to rush out and get an EV before I'm the only one in town without one.

I believe auto sales are on track to set new records this calendar year (2015) hitting 17 million vehicles or something like that (don't quote me on that), so let's see what the top US EVs are doing, from the linked article, for March, 2015 (March, 2014):

• Tesla S: 2,000 (1,800) -- if you believe the numbers; only estimates; see below
• Nissan Leaf: 1,817 (2,507) -- huge decrease
• BMW i3: 922 (0) -- must be a new dealer in west LA, Brentwood, or Hollywood

Then skipping to number 5:

• Chevy Volt: 639 (1,478) -- dying a slow death
• Toyota Prius: 401 (1,452) -- wow, wow, wow -- put this one on the endangered list

And everyone's favorite:

• VW e-Golf: 181
• Chevy Spark: 151 (108) -- not looking good -- being outsold by the Volt -- wow

The Tesla numbers (from the linked article):

Speaking of Tesla, as you well know, it doesn’t report monthly sales (read: delivery) figures, and it doesn’t break out sales by country. Nonetheless, based on quarterly figures and statements from Tesla CEO Elon Musk, we can make some decent estimates regarding how many Tesla vehicles go to the US, and then just break out the pie cutter to segment that into monthly figures. The latter part is the most sketchy, btw — I break it out more or less evenly to better tell the story (realistically, Tesla makes the large majority of a quarter’s shipments to the US in a single month, for logistical reasons).

Best comment at the linked article:

The total sales for a year of all these models combined is 3 weeks of Camry production. Two weeks of F150 production.

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Someone Who Will Never Buy A Tesla

Speaking of batteries: the reviews are starting to come in on the Apple Watch and how long a full charge lasts. The news is .... drum roll ... extremely good. But I had to LOL when I read this comment at the linked article:

"By the end of each day, I was hyper-aware of how low the Apple Watch battery had gotten. After one particularly heavy day of use, I hit 10 percent battery at 7pm, triggering a wave of anxiety. But most days were actually fine. Apple had a big challenge getting a tiny computer like this to last a day, and it succeeded — even if that success seemingly comes at the expense of performance."

If this guy is triggered with a "wave of anxiety" because his Apple Watch hits 10% battery capacity left at 7:00 p.m. (about 12 hours of continuous use), something tells me this guy is never going to buy an EV. Can you imagine his "wave of anxiety" when he sees 10% battery capacity left in his Tesla in the middle of Wyoming?

He also needs to make sure he has a three-month supply of Valium when traveling overseas. Which I doubt he ever does.

Fact-Checking: Completion Deadlines? -- April 8, 2015

Back on March 15, 2015, I said that North Dakota requires that wells be completed within a year of being drilled. I did not provide a source but I recall vividly having read that somewhere. A reader has called me on that -- if I had a source for that.

I think my source was a good source, but for all I know it was a comment made by a reader who has a friend who has a sister whose husband works somewhere in North Dakota who made that comment in passing.

Until recently, there was probably no concern about deadlines for completing a well, but it's a good question. So, if anyone knows ... a lot of readers would appreciate it.

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Responses

12:50 p.m. CT, same day:  You asked readers for help in finding information on subject. The only definitive ND official information I have found is at: http://www.legis.nd.gov/information/acdata/pdf/43-02-03.pdf?20150408122852. See Section 43-02-03-55. Abandonment of wells or treating plants - Suspension of drilling.

The pertinent first paragraph reads:

1. The removal of production equipment or the failure to produce oil or gas, or the removal of production equipment or the failure to produce water from a source well, for one year constitutes abandonment of the well. The removal of injection equipment or the failure to use an injection well for one year constitutes abandonment of the well. The failure to plug a stratigraphic test hole within one year of reaching total depth constitutes abandonment of the well. The removal of treating plant equipment or the failure to use a treating plant for one year constitutes abandonment of the treating plant.

Generally speaking, when I review file reports, wells that have not been completed have little to no production. 

Biggest Story Of The Year -- The Brontosaurus Is Back -- April 8, 2015

I would have posted the story anyway, but I am especially happy to be able to post this story for Don, who probably never gave up rooting for the Brontosaurus.

Scientific American is reporting:

Some of the largest animals to ever walk on Earth were the long-necked, long-tailed dinosaurs known as the sauropods—and the most famous of these giants is probably Brontosaurus, the "thunder lizard."

Deeply rooted as this titan is in the popular imagination, however, for more than a century scientists thought it never existed.

The first of the Brontosaurus genus was named in 1879 by famed paleontologist Othniel Charles Marsh. The specimen still stands on display in the Great Hall of Yale's Peabody Museum of Natural History. In 1903, however, paleontologist Elmer Riggs found that Brontosaurus was apparently the same as the genus Apatosaurus, which Marsh had first described in 1877.

In such cases the rules of scientific nomenclature state that the oldest name has priority, dooming Brontosaurus to another extinction.

Now a new study suggests resurrecting Brontosaurus.

It turns out the original Apatosaurus and Brontosaurus fossils appear different enough to belong to separate groups after all.

"Generally, Brontosaurus can be distinguished from Apatosaurus most easily by its neck, which is higher and less wide," says lead study author Emanuel Tschopp, a vertebrate paleontologist at the New University of Lisbon in Portugal. "So although both are very massive and robust animals, Apatosaurus is even more extreme than Brontosaurus."

I always knew they never should have "done away" with Brontosaurus. 

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Beautiful Walk

Yesterday I mentioned the beautiful stroll I took with our youngest granddaughter yesterday. Here is one of the views, just a few blocks from our apartment complex:

Getting Serious In Yemen -- April 8, 2015; Hydrocarbons (2014): US #1; Russia #2; Saudi Arabia #3

Alcoa to report after market close today, I believe.

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Yemen

Getting serious -- sometime ago I mentioned that Yemen was becoming the proxy war between Saudi Arabia and Iran, and perhaps even between the US and Russia.

Over at Fox News there is a story that President Obama will sent weapons to Saudi Arabia as fast as he can -- as long as it doesn't interfere with his golf game, I suppose. Meanwhile, there is a Drudge headline that Iran is sending a ship of some sort to Yemen. WWI started with less.

So, let's see what oil is doing at the opening. Down $1.33 or thereabouts.

On another note, pundits say that if Shell buys BG, it will challenge Exxon for dominance. Deep in the article, based on market cap, Exxon has nothing to fear. However, my hunch: Exxon makes a bid for something before the end of the year. Some folks have been saying that for years; I'm late to the game.

With regard to Shell and BG:

The third-biggest oil and gas deal ever by enterprise value will bring Shell assets in Brazil, East Africa, Australia, Kazakhstan and Egypt, including some of the world's most ambitious liquefied natural gas (LNG) projects.

Shell is already the world's leading LNG company and it would get BG's capacity in LNG logistics -- complex infrastructure that includes terminals, pipelines, specialised tankers, rigs, super coolers, regasification facilities and storage points.

Regardless of how this works, I have opined for years that the 21st century will be the century for fossil-fuel resurgence. Fossil fuel never went away but its new "popularity" is stunning. Remember: EV's run on coal.  Particularly in China.

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EIA Blurb

Yesterday's EIA blurb:

The United States remained the world's top producer of petroleum and natural gas hydrocarbons in 2014.

U.S. hydrocarbon production continues to exceed that of both Russia and Saudi Arabia, the second- and third-largest producers, respectively. For the United States and Russia, total petroleum and natural gas hydrocarbon production, in energy content terms, is almost evenly split between petroleum and natural gas. Saudi Arabia's production, on the other hand, heavily favors petroleum. --- EIA

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Death Watch

Greece: Cuba 2015

CNBC is reporting:

Greece sold over a billion euros worth of short-term treasury bills Wednesday in a bid to scrape together enough cash to meet is debt repayment deadlines, while a visit to Moscow might also give the country a desperately needed financial lifeline.

Greek Prime Minister Alexis Tsipras is due to meet Russian President Vladimir Putin in Moscow Wednesday and as his country apparently approaches economic ruin, analysts are concerned Tsipras could resort to drastic measures to save it from collapse. 

Reminder On MyMinerals.Com -- April 8, 2015

This was posted back in March. I'm not sure if they are still doing "beta-testing" but if you have minerals you may want to check out "myminerals.com":

www.myminerals.com is looking for some folks with minerals to test out their new site. I don't have any minerals, but I have gone to the site and given them my e-mail address and county where I have (fantasy) mineral rights, to help them test their site.

The individuals at myminerals.com are hoping to get a number of folks interested to test the new site. If I understand them correctly, once they have a number of folks interested, they will then poll the "beta testers" to see what functionality (or functionalities) those early testers are most interested in.

I will be "playing" with fantasy minerals to help them develop their site. One of the things I hope to gain from this: apparently their maps load more quickly than Bing or Google maps. Long-time readers might remember a Bakken mapping service that was absolutely incredible, but it was not up very long due to personal health reasons involving the website designer. There are other map sites, none of which I use any more, and to the best of my knowledge, they only "map"; they don't help mineral owners track "their" wells with regard to production. 

The second thing I would be interested in: if the myminerals.com has an "app" that can be accessed through the Apple app store or similar store at an Android/Google site. 

If the site works, I hope they break down production by oil, natural gas, and other produced products.

I don't have any personal relationship with the developers of myminerals.com but they have been in touch with me over the past few months and everything seems to be "on the up and up," as they say. I am not being reimbursed anything for this "shout-out." I just like to see the where these products might take us.

Wednesday, April 8, 2015 -- One Week Before April Fifteenth

Active rigs:

	4/8/2015	04/08/2014	04/08/2013	04/08/2012	04/08/2011
Active Rigs	93	191	185	208	173

RBN Energy: this year's natural gas power burn and the Marcellus.

This year’s natural gas power burn is shaping up as a record-breaker, mostly because gas consumption needs to rise sharply to offset increased production and the power sector is best able to ramp up its gas use. But what will it take, gas-price-wise, for utilities and independent power producers to increase their 2015 power burn by 2, 3 or even 4 Bcf/d this year? And which parts of the U.S. are likely to see the most dramatic coal-to-gas switching? Today we continue our look at this year’s power burn and its significance to Marcellus and other gas producers.

Huge volumes of natural gas will be produced in the Lower 48 in 2015, probably upwards of 75 Bcf/d, or more than 50% higher than 10 years ago. Once it’s injected into a midstream pipeline all that gas will need to find a home and—at least until the first liquefaction units at Sabine Pass LNG come online late this year or early next—there are only two homes available: storage or immediate use (for space heating, power and steam generation, export to Mexico etc.). One challenge gas producers and marketers must grapple with this year is that, while demand for gas from U.S. industrials is on the rise and Sabine Pass and other LNG export facilities are on the horizon, gas storage facilities may not have room to absorb as much surplus gas as they did last spring, summer and fall. (If they did, they’d be pushing their storage limits.)

Power generation is the only gas-consuming sector with the capacity and flexibility to absorb large incremental volumes of gas. Another way to put that is, electric utilities and independent power producers (IPPs) will likely burn a lot of gas in the next nine and a half months (and probably in 2016 too) to keep gas production and consumption (plus storage) in balance.

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Perhaps Hillary Was Right

Russia hacks the White House internet but no word that anyone has hacked Hillary's secret server(s). CNN is reporting:

Russian hackers behind the damaging cyber intrusion of the State Department in recent months used that perch to penetrate sensitive parts of the White House computer system, according to U.S. officials briefed on the investigation.

While the White House has said the breach only affected an unclassified system, that description belies the seriousness of the intrusion. The hackers had access to sensitive information such as real-time non-public details of the president's schedule. While such information is not classified, it is still highly sensitive and prized by foreign intelligence agencies, U.S. officials say.

The White House in October said it noticed suspicious activity in the unclassified network that serves the executive office of the president. The system has been shut down periodically to allow for security upgrades.

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Sweet Spots for "EVs": 18 - 25 Miles (No Typo)

Article over at Seeking Alpha on recent "car show." Highlights:

• current emphasis by major vehicle manufacturers on hybrid plugin EVs, with big emphasis on electric drive range of 15-30 miles
• New York Motor Show commentary indicates a long way to go for fully electric EVs
• Chevrolet and Nissan announce new generation fully electric cars with 200 mile range

The writer notes: 

The recent New York motor show, and the press coverage indicate the US mindset about personal vehicle transport… it still involves an internal combustion engine.

Curious is the claim that the "sweet spot" for an EV is an 18-25 mile range (with a "real" engine to stop being stranded constantly)! In what parallel universe is this a functional EV? Is it just the internal combustion engine car you have when you want to pay lip service to the rise of the EV? Or perhaps a way for the big car companies to extend the life of their cars with engines a little longer, rather than confronting the reality of the change. A lot of manufacturers are doing this. More seriously, perhaps a major motivation for having electric capacity for short trips means that the stated fuel consumption can be brought down to levels required by regulators.

But this may be what explains Tesla:

Norway is to EVs what Germany was to solar PV. 

For an emerging technology that isn't "there" yet, you need action by early adopters that understand that the first steps in a revolution are often hard to justify economically. Norway's commitment was to put 50,000 EVs on Norwegian roads and this will end in success soon. This may be a temporary setback for Tesla, and it may come in the next couple of quarters if the Norwegian government doesn't manage generously withdrawal of the generous subsidies.

In the EV space, the Norwegian experience has not gone unnoticed and some features of the Norwegian incentives are catching on in polluted cities around the world, as well as in environmentally aware California. For example, London exempts plug-in vehicles from its commuter tax. It may be that the way officials restrict cars into crowded and polluted cities is to allow only emission free vehicles, which would be a huge boost for fully electric cars. China seems to be heading in this direction, as are a number of European countries.

Imagine.