Tuesday, May 26, 2015

Minimal Blogging -- We've Lost Our Internet Connection At Home Due To Texas Thunderstorms, Flooding, And Gremlins; Whiskey For My Men, Beer For My Horses

There is nothing about the Bakken in this post. If you came here looking for the Bakken, move on, skip this post. I am posting this mostly for the archives, for the granddaughters.

I'm at Starbucks doing a bit of internet surfing. Fortunately they are open to 10:00 p.m. tonight. I'm not sure when our internet will be back up. Our internet at home is always "iffy" but with storms, flooding, and the usual gremlins, it's even worse right now. As in "not working."

The good news is that I read a bit more at home and watch a few more DVDs when I lose the internet. If my wife did not mind, I would get rid of cable completely: no television and no internet at home. I find enough wi-fi opportunities without needing connectivity at home, and television hasn't been a factor in my life for years.

I generally read about five books at a time -- actually, I don't really read five books at a time -- I generally have about five books at arm's length at any given time and I read whatever interests me at the moment. The two classics I am reading right now are Fitzgerald's This Side of Paradise and Oscar Wilde's The Picture of Dorian Gray. It is simply a coincidence that I am reading them at the same time. I say that because I finished the first chapter of Dorian Gray last Friday, and then today, started the second chapter of Paradise. In the second chapter, Fitzgerald's character spends a couple of pages discussing Wilde's Dorian Gray. Had no idea. Amazing.

I don't recall reading any Fitzgerald in high school, nor in college. How I missed Fitzgerald, I don't know. Took too many science courses, I suppose. I would not have enjoyed Fitzgerald in my teens, early twenties. I needed life experiences to enjoy Fitzgerald. It was important to read the introduction by Sharon G. Carson to understand why this book was considered his best. I'm not sure I would have enjoyed the book as much had I not read her introduction.

I also just received the classic on the Indian tipi -- first edition written back in 1957 or thereabouts and the second edition published in 1989, I guess. It it incredibly good. I have just browsed through it, and am eager to start getting serious about it. When I find a book that I'm really going to enjoy, I don't like to start it until in exactly the right mood, and with the right munchies and right beverage.

A fourth book is a novel of Ernest Hemingway's first wife, Hadley, The Paris Wife: A Novel. I  have the soft cover edition; it looks wonderful, better than I ever expected.

And finally, a book that just came out this year, Oliver Sacks, On The Move, A Life. If one enjoys the best of Hunter S Thompson's writing (his letters -- first volume), and Hell's Angels, I think one will enjoy this Oliver Sacks book. I've also just read the first chapter of this book and don't think I've enjoyed a book this much in a long, long time.

Minimum Wage

Speaking of minimum wage, which we weren't, this is a note from my journal, dated: 11:00 p.m. -- July 25, 1969, Friday, Williston, ND --

Worked 9 - 5. Pulled jeep home -- installed new voltage regulator but it still discharges sporadically. Not much new. Goodnight, diary. Got paycheck for $53.00 for 33 1/2 hours work last week. Only $42.12 left after taxes, etc. [Page 328] 
$53/33.5 hours = $1.58/hour -- don't even talk to me about $15/hour minimum wage.


Wow, it's pouring rain right now, outside Starbucks. It is amazing. Must be "inches per hour." I'm hoping they extend the hours because of the rain. Of course, they won't do that, but if I were the manager, I would send the employees home at the regular closing time (if they wanted to leave) and then just kick back, enjoy coffee with any of the regulars that are still here. Perhaps even order pizza for the regulars. And maybe something other than coffee ...

Beer For My Horses, Willie Nelson and Toby Keith

This might be a good anthem for Baltimore, Milwaukee, and Cleveland.


This is too technical to talk about but this is a very interesting development coming out of Apple: replacing the problematic "Discoveryd" process.

As long as we're talking about Apple --

Smart Watch: Android vs Apple in The Wall Street Journal -- Apple wins, hands wrists down. 

North Dakota's Exports Have Grown From $1 Billion In 2004 To Over $5 Billion In 2014 -- May 26, 2015


May 27, 2015: see first comment. I am bringing it up here so it is google-searchable:
There is a big Case IH tractor plant in Fargo, which used to make Steiger tractors, which were huge (and help end the need for farm labor). Also, Phoenix Incorporated, a subsidiary of John Deere, has a plant in Fargo to assemble electronics for other Deere plants.

There's a number of smaller implement manufacturers, like Summer Manufacturing, in Devils Lake.

Original Post

This is really, really cool. For the mainstream media this story might not be much more than a footnote to all that is going on in North Dakota, but for me this may be the biggest story of the month. It takes me back to "Pigs In Space -- Almost. But, It's Kows Over Kazakhstan" posted back in October, 2011.

The AP is reporting:
A group of government and business leaders from Belarus is touring North Dakota this week to talk about trade. This is the second visit by a Belarusian delegation within the last year.
The delegation is interested in the state’s beef, dairy and agriculture sector, including farm machinery.

Officials say North Dakota’s exports have grown from $1 billion in 2004 to nearly $5.3 billion in 2014. The state’s top exports include front-end shovel loaders, tractors, wheat and soybeans.
Farm machinery? I am unaware of any farm machinery manufacturing in the state of North Dakota except for "Bobcat." But see RDO Equipment below.

For those who have forgotten, Belarus separates Poland from Russia, and is almost the same latitude as North Dakota. (Minsk: 54 degrees north; Alamo: 49 degrees north.)

By the way, speaking of Kazakhstan, this is from an October, 2014, press release:
The North Dakota Trade Office (NDTO), along with North Dakota agriculture machinery and technology companies, are returning to the KazAgro Farm Show October 27-29, 2014, in Astana, Kazakhstan.  This year, the Ministry of Agriculture of the Republic of Kazakhstan – the main sponsor of the show – has invited NDTO to co-sponsor the program, because of North Dakota’s long-standing relationship with leaders in the Kazakh agriculture sector.
That link will take you to RDO Equipment:
Despite these impressive gains, RDO Equipment's true growth spurt did not begin until 1997, when Offutt opted to take the company public with the hope of generating capital with which to fuel future expansion. In its initial public offering, launched in January 1997, RDO Equipment sold about 42 million shares and raised $68.3 million, becoming the first corporation based in North Dakota to be listed on the New York Stock Exchange. The company immediately used $10 million of this total to retire debts and paid out another $15 million in dividends to existing shareholders. The remaining $34 million was intended 'to allow us to continue to grow the company, expand our dealership numbers,' Offutt explained to the Fargo Forum.
Unwinding The Nation's Worst Nightmare Will Take Decades

This story was printed in The Washingon Post of all places. One would have expected to see this in the Orange County Register.

President Obama's second-term agenda, it seems, is in the hands of the courts. Same-sex marriage. Immigration. ObamaCare. Climate change.

It will take decades to unwind this. This is not to say that I'm in favor or not in favor of any of his initiatives, it's just what The Washington Post is saying.

And the article didn't even touch on what has already happened in the Mideast due to his policies.

Or the US energy industry.

Flooding The Market And Other Hyperbole -- May 26 ,2015

It took all the energy I had to link this story. Bloomberg is reporting:
Iraq is taking OPEC's strategy to defend its share of the global oil market to a new level.
The nation plans to boost crude exports by about 26 percent to a record 3.75 million barrels a day next month, according to shipping programs, signaling an escalation of OPEC strategy to undercut U.S. shale drillers in the current market rout.
The additional Iraqi oil is equal to about 800,000 barrels a day, or more than comes from OPEC member Qatar.
The rest of the Organization of Petroleum Exporting Countries is expected to rubber stamp its policy to maintain output levels at a meeting on June 5.
Talk about hyperbole ... taking things to "a new level."

I saw the article earlier today but was ambivalent about linking it. A reader sent the link later and I figured for archival reasons, I need to link it. 

The headline for this story: Iraq Is About To Flood The Oil Market.

That was a Bloomberg headline. A country at war, who has just lost its biggest province to a JV team, and simply announces it will increase production is hardly "about" to do anything. Then, when I saw the "800,000 bopd" increase -- ? That's hardly "flooding" the market. I have no idea what it even means to say this is equivalent to what "comes from OPEC member Qatar. 

I don't want to mix apples and oranges, production vs exports, but production figures are very, very hard to come by. Even import figures are several months old. But that statement suggesting the additional Iraqi oil is more than what comes from Qatar is almost laughable. In the most recent data available, and again note, this is imports NOT production, the US imports as much oil from the Bahamas as it does from Qatar

Bloomberg may link the Iraqi message to US fracking, but one can hardly deny that this is as much about OPEC members scrambling to save market share as it is about competing with US shale. 

From the attached graph, it certainly looks like Qatar is scrambling to find new markets for its oil. I assume Bahrain is also scrambling to find new markets for its oil. 

Source: EIA.

In a few months, we will get the data. US auto dealers report auto sales for any given month within 24 hours after the end of the month; on the other hand it takes the EIA three months or more to tally up how much oil is imported into the US. This is almost June and the latest data is for February. And as far as "production" goes, it's anybody's guess what foreign countries are actually producing.

Five (5) New Permits -- May 26, 2015

Active rigs:

Active Rigs84191186214173

Wells coming off confidential list Tuesday:
  • 29057, drl/NC, XTO, Amundson 34X-22E, Siverston, no production data,
  • 29085, SI/NC, WPX, Helena Ruth Grant 33-34HC, Reunion Bay, no production data,
  • 29270, 948, Hess, EN-Cvancara-155-93-1522H-7, Alger, t4/15; cum 4K 3/15;
Five (5) new permits --
  • Operators: QEP (4), Luff
  • Fields: Heart Butte (Dunn), Corey Butte (Bowman)
  • Comments:
Five (5) producing wells completed:
  • 28375, 974, Hess, AN-Brenna-LE-153-94-3129H-2, Antelope, Sanish, 4 secs, t5/15; cum --
  • 28543, 1,107, Hess, BW-Arnegard State-151-100-3625H-6, Sandrocks, t5/15; cum --
  • 28871, 659, Hess, GO-Hodenfield-157-97-0607H-2, Ray, t5/15; cum ---
  • 29165, 739, Hess, SC-Norma-LE-154-98-0705H-2, Truax, t5/15; cum --
  • 29348, 927, Hess, SC-Ellingsberg-154-98-3239H-4, Truax, t5/15; cum --

Background Gases In Bakken Wells -- May 26, 2015

Background gas in Bakken wells is often mentioned: 100 units is equal to 1% methane equivalent in air. Source: MRO, file #28231, page 27 of 140, May 26, 2015.

Not A Whole Lot Longer Than A Simple Vertical

If I read this report correctly, this short lateral in the Bakken was drilled in seven days:
  • 27765, 484, EOG, Wayzetta 57-3433H, Parshall, 30 stages; 4 million lbs; spud date June 18, 2015; lateral begun June 22, 2014; FTD date, June 25, 2014; TD, 15,731 feet.
If I read this report correctly, this short lateral in the Bakken was drilled in nine days
  • 27764, 834, EOG, Wayzetta 54-34H, Parshall, single section, 22 stages; 3 million lbs; spud date June 27, 2014; lateral began July 4, 2014; FTD date, July 6, 2014, horizontal in pay zone 100%, t11/14; cum 36K 3/15;  

From Yahoo!In-Play:
American Midstream Partners begins open season for Bakken Crude Oil Gathering System in North Dakota : American Midstream Partners announced that American Midstream Bakken, a wholly-owned subsidiary of the Partnership, is conducting a binding open season for a proposed approximately 50-mile Bakken crude oil gathering and transportation system in the core of McKenzie County, North Dakota, to transport up to 40,000 barrels per day of crude oil for delivery to major intrastate and interstate pipeline systems beginning in June 2015.
As proposed, the Bakken System will have initial transportation capacity up to approximately 15,000 bopd with the ability to expand up to ~40,000 bopd.

Dividend Announcement

Previously announced, WMB increases quarterly dividend from 58 cents to 59 cents, yielding nearly 4.5%. 

Data Starting To Be Updated -- May 26, 2015

Bless their hearts. The NDIC folks came in early after a long weekend and have already started updating the initial production numbers for wells coming off the confidential list. I will re-fresh the page as I update their data. Link here.

Update: the data was all updated by 9:15 a.m. or thereabouts. Huge "thank you" to the NDIC folks for getting this done so quickly. Lots of scanning; a lot of databases updated.

Active rigs:

Active Rigs84191186214173

Tuesday, May 26, 2015

Active rigs:

Active Rigs82191186214173

Another Great Bakken Analysis By RBN Energy 

The analysis will be archived at the source, by the source. As usual, great graphics at the RNB Energy blog.

RBN Energy: how Energy East will compete for Bakken oil.
The latest estimates from North Dakota show production edging up in March 2015 after a two-month decline. But the heady days are over for the moment - in the wake of lower crude prices - as even optimistic forecasts project flattened growth. Meanwhile combined rail and pipeline crude takeaway capacity out of North Dakota are already far higher than production – but new projects like the TransCanada Upland pipeline continue to be pitched to shippers. Today we describe how that means producers defecting from existing routes.
In Part 1 of this series we outlined the latest crude takeaway project in the Permian Basin – a 540 Mb/d pipeline between Midland and Sealy, TX - announced by Enterprise Product Partners (EPD) at the end of April. Although the EPD pipeline has signed up shipper support, those shippers are likely to be defectors from existing pipelines, because the incremental capacity does not appear to be justified by forecast production estimates. In Part 2 we turned to the most recent crude takeaway project announced in North Dakota – the TransCanada Uplands pipeline - that will offer at least 220 Mb/d of capacity for Bakken producers to ship crude north of the border to Canada.
An interconnect with the TransCanada Energy East pipeline at Moosomin in Saskatchewan will then allow those barrels to flow east to refineries in Eastern Canada and potentially all the way to the Atlantic Seaboard by 2020. Like the EPD Permian project, the proposed TransCanada Upland pipe will add more pipeline takeaway capacity from North Dakota than current production estimates justify.
In fact – in the Bakken, most crude is still shipped by rail (although the balance is moving towards pipelines) and when you add rail capacity to the current and planned pipelines – the total is almost double RBN’s “Growth” production scenario by 2020. This time we describe how the Upland pipeline could compete head on with an existing Enbridge project as well as with imports to Eastern Canada coming from the Eagle Ford in South Texas and rail shipments to U.S. East Coast refineries.
So our analysis suggests that the Upland pipeline link to Energy East makes a lot of sense for Bakken shippers because it opens up new markets in eastern Canada and a potentially cheaper access route to East Coast refineries.
The Energy East pipeline is planned to be quite large (1.1 MMb/d) and so it should be possible to expand the Upland “Bakken on-ramp” beyond the initially planned 220 Mb/d if justified by demand.
As we have seen, Energy East has the potential to displace quite a lot of Bakken barrels currently shipping by rail. The Energy East route also seems to offer a better route to Quebec refineries than the Enbridge alternative Line 9 reversal. But lets return to the theme of this blog series – whether the new pipeline capacity is need to have or “nice” to have? Our “stack” chart in Part 2 showed there is more than enough capacity when rail and pipeline are combined.
And because the planned pipeline capacity in North Dakota will exceed crude production sometime in 2017 by our estimate, the Upland capacity is not strictly needed. However TransCanada should be able to attract defections – certainly from rail but also from other pipelines. That is because existing pipeline routes out of North Dakota are largely headed to competitive refining centers at the Gulf Coast.
For Bakken producers the less competitive (and therefore more attractive) markets are East and West Coast refineries that can currently only be reached economically by rail. The TransCanada Upland project has the potential to attract those barrels away from rail. So if Upland and Energy East get built there is likely to be a lot of excess pipeline capacity out of North Dakota to the Midwest and Gulf Coast. At least until the pace of production growth takes off again in North Dakota.

Orders for durable goods drop 0.5% in April. The AP's lede paragraph: still optimistic. Ignore the durable goods data; focus on "a category that reflects business investment [which] posted a second increase, a hopeful sign that his key sector is starting to revive [after a gazillion dollars in stimulus]. When the durable goods data was released, futures on the Dow went up from 22 on the upside to 45 on the down side. 

US new home sales, prices rise sharply in April.

Greek funding talks have stalled. Hey, we have the entire month of June to solve this problem.

Venezuela spiraling into economic chaos. Those who can are switching to US dollars. 

Baltimore Update
May 26, 2015: bloodiest weekend yet in Baltimore -- CBS Baltimore. Over the weekend, 28 shot, 9 dead. 
It’s the deadliest month Baltimore has seen in more than 15 years. More than two dozen shootings over the holiday weekend alone have city police working around the clock. 
Now, leaders hope community members come forward to help stop the violence.
There have been 108 homicides in the city this year. City police are now putting together mini task forces to hit hot spots throughout the city.  
I wonder if the mayor agrees that the police need to be involved, or if it's just better to give these thugs a bit of space to maim, kill, and destroy.

On May 8, 2015:
The Boston Globe is reporting:
What’s more, a disproportionate chunk of the money that the city has goes to its most pressing need: public safety. While cities like Boston and New York capitalized on dramatic declines in crime to fuel urban renaissances over the past three decades, Baltimore continues to suffer from chronically high levels of violence. In 2016, Baltimore will spend about $130 million more than Boston will on policing. This makes sense and it doesn’t — Baltimore had 235 homicides in 2013. Boston had 40 that year. (Baltimore's population is slightly less than that of Boston.)
Sort of goes back to the same questions that need to be asked in Milwaukee
So, how are things going? In today's Baltimore Sun:
The city has experienced 100 homicides this year, compared with 71 at this time last year, the police department said. It's the fastest the city has reached 100 homicides since 2007. Last year, the city reached the mark on July 4. Nonfatal shootings are up more than 70 percent with at least 19 people shot on Tuesday and Wednesday.
100 homicides in 140 days (through May 21, 2015) = x homicides in 365 days; Baltimore is on track for 260 homicides in 2015

The mayor says she has faith in the police department to turn this around.

One comment: Sort of goes back to the same questions that need to be asked in Milwaukee.

Same In Chicago

Chicago, not to be outdone by Baltimore, reported 12 deaths, 43 wounded over the long holiday weekend.  It sounds like many of the victims were sitting in SUVs when another vehicle pulled up alongside, a shooter got out, and shot the occupants in the SUV.

Manhattan, Too

The NY Post is reporting:
Murders are way up so far this year in Manhattan.
Sixteen people were killed around the borough between the first of the year and Sunday.
Over the same period last year, the figure was 11. That’s an increase of about 45 percent.
Shootings in the borough have also soared.
There have been 50 “shooting incidents’’ since January 1, compared with 31 in the same time period in 2014 — an increase of about 38 percent. Some of these “incidents’’ involved more than one victim.
The number of shooting victims nearly doubled, from 33 to 61.
Fake Classes In Los Angeles School System

The Los Angeles Times has an interesting op-ed about Los Angeles city school system putting some students in "fake classes." I remember something similar when I was a substitute teacher in the San Antonio area. The state is looking to abolish the practice as well as: prohibiting two other practices schools use to disguise their scheduling deficiencies: sending students home early and signing up a handful of them as teachers' "assistants."

I was often surprised by the caliber of the students that had been selected to be teachers' assistants. I can tell from the editorial the writer has never taught high school.