Random Look At A BR Case In June Hearing Dockets Requesting Permission For 22 Wells In A 2560-Acre Drilling Unit -- May 29, 2015

There were a few interesting items in the June hearing dockets that came out today, including this case:

• 24120, BR, Pershing-Bakken, 22 wells on a stand-up 2560-acre unit (29/32-150-96, 5/8-149-96), McKenzie

This is the proposed 2560-acre stand-up drilling unit:

The vertical wells in section 29-150-96 are all very, very old Madison wells (with one exception).

I find it interesting what BR must have found on the core samples taken from the other Bakken horizontal wells in the area. The earlier wells were not particularly outstanding wells, but they were good wells. It looks like BR thinks they can get even better wells going forward.

Up at the very top of the graphic, one can see two rigs next to each other: BR sites. Most everything in the center of the graphic is BR. BR is a subsidiary of COP.

The single rig off to the northwest (upper left corner) is an Abraxis site.

Note the Grail oil field just to the east (right).

*******************************

When Does The NFL Season Start? I'm Starting To Go Through Withdrawal

I Hate Myself For Loving You, Joan Jett

President Obama Sets Another Record -- May 29, 2015

CNS is reporting:

Even if you leave out the first quarter of 2009—when the recession that started in December 2007 was still ongoing--President Barack Obama has presided over the lowest average first-quarter GDP growth of any president who has served since 1947, which is the earliest year for which the Bureau of Economic Analysis has calculated quarterly GDP growth.

The numbers are so bad, Janet Yellen doesn't believe them (the numbers). She faults the models which have been in use since 1947.

For the record, the White House blamed 1Q15 GDP on the weather, which was said to be "wintry." 1Q15 is January, February, March -- generally "wintry" months. Can't make this stuff up.

From The Williston Wire -- May 29, 2015

Stony Creek Rail Yard, industrial park with rail access to open:

A longtime Williston business has announced it is building a rail served industrial park that is shovel ready. Red River Supply has released its Stony Creek Rail Yard Master Plan. The 180-acre site is located in southeast Williston with immediate access to rail and road transportation. The development is owned and operated by Rich Vestal and his family. Vestal started the business in 1978 and since then it has grown and diversified. Red River Supply currently provides rail access, transloading, trucking, drilling and completion supplies, warehousing as well as new industrial park.

Starbucks to open in Williston -- at Mercy Medical Center.

Watford City breaks ground on $83 million events center -- previously reported.

Construction begins on new Bismarck public schools athletic complex:

Construction is underway at Legacy High School for the new Bismarck Public Schools Athletic Complex. The facility will have a football and soccer field, 8-lane track, 2 practice fields, 2 softball fields, and 2 baseball fields. Initially the complex will hold 3,500 people. "This is a district facility. This is going to be used by all of the high schools, all of the middle schools, and by a lot of our private schools," says Jim Haussler, Bismarck Public Schools Activities Coordinator.

Ground breaking held for affordable apartments in Sidney; Sunset Village Apartments; 36 units

 Really, really cool: Watford City-based singer/songwriter and Nashville recording artist Jessie Veeder kicked off the celebration of the release of her fourth original studio album Northern Lights by hosting a CD release concert and party recently at the Outlaws' Bar & Grill Ballroom in Watford City. Veeder was joined by several members of her band, special guest and friend, Adam Taylor, and her dad, Gene Veeder

Week 21: May 24, 2015 -- May 30, 2015

Best posts of the week
Crude oil up almost 5% in one day; OPEC numbers released

Operations
June, 2015, dockets  
QEP: three proposed 4-well pads in Heart Butte
QEP: two proposed 4-wells pads in Heart Butte
Two busy sections in Robinson Lake; one Hess, One Oasis
Enerplus' huge Monarch well comes off confidential list
24/7 Wall Street on Bakken rig count

Bakken 101
Background gases in Bakken wells
EOG drilling fast in the Bakken

Bakken economy
Bowman County's new airport opens
Drones -- UND -- Grand Forks -- Grand Sky 

Fracking
Investopedia talks about Chesapeake's opportunity to re-frack
Locations and sources for fracking sand -- a USGS database

Flaring
Random observation

Mergers/Acquisitions
Crescent Point Energy to Acquire Legacy Oil + Gas

Miscellaneous
US crude oil import numbers
US oil production hits 43-year high
US gasoline demand, breaking all kinds of records

Agriculture
North Dakota exports jump to $5 billion / year

Active rigs:

	5/29/2015	05/29/2014	05/29/2013	05/29/2012	05/29/2011
Active Rigs	80	187	183	218	172

Five (5) new permits --

• Operators: BR (3), Hess, Crescent Point
• Fields: Union Center (McKenzie), Beaver Lodge (Williams), West Ambrose (Divide)
• Comments:

Five (5) permits canceled including three HRC permits in Dunn County.

Five (5) producing wells completed:

• 29349, 656, Hess, SC-Ellingberg-LW-154-98-3229H-1, Truax, t5/15; cum --
• 29818, 915, SC-Norma-LE-154-98-0706H-1, Truax, 4 sections, t5/15; cum --
• 28872, 594, Hess, GN-halseth-158-97-3130H-2, New Home, t5/15; cum --
• 29117, 1,651, XTO, Frisinger 34X-8D, Hofflund, t4/15; cum --
• 29116, 1,435, XTO, Frisinger 34X-8H, Hofflund, t4/15; cum --

Cool -- Bowman County's New Airport Opens -- May 29, 2015

A cool $16 million.

Bakken.com is reporting:

Lt. Gov. Drew Wrigley says the Bowman County Municipal Airport 4 miles east of the town of Bowman spans 400 acres and has a 5,700-foot runway — the longest small general aviation runway in the state.

Wrigley says the opening of the airport will help address the impacts of rapid growth in the oil patch region.

Funding came from a variety of local, state and federal sources, including more than $2.9 million in state Energy Impact grants.

5,700 feet -- about the length of a short lateral.

"B" Side Will Get More Air Time -- May 29, 2015

Updates

June 8, 2015: great op-ed on the ethanol scam in today's WSJ. It begins:

Mark down May 29 as the date when the last tether connecting ethanol subsidies to reality came unhitched, and the fuel made from corn and tax dollars achieved a kind of postmodern perfection. On the same day the Obama Administration conceded that the U.S. auto fleet cannot practically consume enough ethanol to fulfill Congress’s quotas, it announced a new program so motorists can consume more ethanol.

In other words, the point of the subsidy is the subsidy, and therefore the U.S. must subsidize ethanol because the U.S. already subsidizes ethanol. Once in place, such self-referential mandates appear to be eternal.

The 2007 energy bill’s renewable fuel standard requires certain annual volumes of ethanol to be bootlegged into the U.S. gasoline supply, but for years the mandate has crashed into the “blend wall.” Ethanol is corrosive, and gallons of conventional gas with concentrations of the stuff higher than 10% damage the engines and fuel systems of most of the cars and trucks on the road today.

The problem is that Americans aren’t guzzling enough gallons to achieve Congress’s mandates at E-10—that is, 10% ethanol, 90% gas. Either we need to drive more in less fuel-efficient cars, consuming more overall. Or the concentration of ethanol in a given gallon needs to rise, risking accidents, breakdowns and valve, pump, cylinder and injector replacements rarely covered by consumer warranties. For model years 2001 through 2011, no car makers allow blends above E-10, and a little fewer than half say it is safe to fill up with E-15 for the last two model years.

To avoid filling this ethanol junkyard but also to avoid displeasing the corn lobby, the Environmental Protection Agency simply refused to finalize the quotas for 2014 and 2015. So the EPA has finally admitted in a regulation that “due to constraints in the fuel market to accommodate increasing volumes of ethanol, along with limits on the availability of non-ethanol renewable fuels,” the volume targets “cannot be achieved.”

The EPA thus proposed quotas that are 3.75 billion gallons below the statutory minimums for 2014, 2015 and 2016.

Renewable Fuels Association president Bob Dinneen raged that this rare EPA recognition of the real world “eviscerated the program’s ability to incentivize investments in infrastructure that would break through the blend wall.” 

Original Post

 

It took a few minutes to sort out what I thought I had heard on the radio. I heard the story on the "B" side but I did not hear the story on the "A" side. Folks who grew up with 45 rpm vinyl will know what I mean.

Anyway, on the "B" side, the EPA will cut ethanol mandates. Bloomberg Politics is reporting:

The U.S. Environmental Protection Agency on Friday proposed cutting quotas for the use of renewable fuels, lowering the mandate for corn ethanol this year and next from the 15 billion gallons set by law.

The decision, more than a year overdue, is a retreat from aggressive goals set by Congress almost a decade ago to promote American-grown alternatives to fossil fuels obtained from hostile nations. The program is backed by corn growers who sell almost a third of their crop to fuel producers, and opposed by the oil industry.

More than a year overdue, the proposal is made halfway into the "new" year. Whatever.

On the "A" side, President Obama pledges $100 million of tax money to be used to support the ethanol initiative. Bloomberg Politics is reporting:

The Obama administration is set to pledge $100 million Friday to expand the use of special fuel pumps that allow drivers to blend more ethanol into their gasoline, according to people briefed on the announcement.

The U.S. Department of Agriculture, which has long championed these so-called blender pumps, may unveil the plan on the same day that the Environmental Protection Agency announces quotas for the use of renewable fuels. With ethanol makers facing a possible cut in their quota below the statutory level of 15 billion gallons, the grant program will let the administration of President Barack Obama demonstrate that it still supports the fuel, which in the U.S. is produced mostly from corn.

The pledge was reported yesterday, even before the EPA reported the new quotas (see side "B" above).  $100 million is a rounding error in a multi-trillion dollar economy but that's why it's reported in Bloomberg Politics.

"A" side:

Reason To Believe, Rod Stewart
"B" side:

Maggie May, Rod Stewart
It depends on which "DJ" you listen to whether you hear the "B" side, or the "A" side. On conservative talk radio, we heard the "B" side; elsewhere it was the "A" side with regard to ethanol.

In this case, the "B side will be the bigger hit, just as it was with the Rod Stewart vinyl above.

June, 2015 Dockets

Disclaimer: these summaries are for my personal use only; you are free to read them; don't quote me on them; there will be typographical and factual errors.  If this is important to you go to the source. Link here.

Past dockets are archived here. 

Wednesday, June 24, 2015

23727, cont'd
23707, cont'd
23641, cont'd
23642, cont'd
23643, cont'd
24068, Petrogulf, Antelope-Sanish, establish 640-ace spacing, two units, multiple horizontal wells, McKenzie, Mountrail
24069, Petrogulf, Antelope-Sanish, establish an overlapping 1280-acre unit; 3 wells, McKenzie, Mountrail
22803, cont'd
24070, Cornerstone, Flaxton-Bakken, proper spacing, Burke
24071, Hunt, Red Wing Creek-Bakken, proper spacing, McKenzie
23965, cont'd
24072, Petro-Hunt, Clear Creek-Bakken, establish an overlapping 2560-acre unit; 1 well, McKenzie
24073, QEP, Deep Water Creek Bay and/or Parshall-Bakken, establish 3 overlapping 1920-acre units; 1+ wells, McLean, Mountrail
24074, QEP, Heart Butte and/or Mandaree-Bakken, establish 3 overlapping 1280-acre units; 1+ wells, Dunn, Mountrail
24075, QEP, Heart Butte and/or Van Hook-Bakken, establish an overlapping 1280-acre unit; 3 wells, Dunn, McLean
24076, QEP, Heart Butte-Bakken, extend, establish nine overlapping 1280-acre units; 1+ wells each, Dunn
24077, QEP, Heart Butte, Twin Buttes, and/or Moccasin Creek-Bakken, establish seven overlapping stand-up 1280-acre units; 1+ wells, Dunn
24078, MRO, Reunion Bay and/or Big Bend-Bakken, establish two overlapping 2560-acre units; 2 wells each; Mountrail
24079, BR, Fancy Buttes and/or Dimmick Lake-Bakken, amend, establish a 2560-acre unit 2 wells, McKenzie
24080, BR, Haystack Butte-Bakken, amend, establish a 2560-acre unit; 1+ wells, McKenzie
24081, Hess, Beaver Lodge-Bakken, establish an overlapping 2560-acre unit 1 well; authorize 11 wells on a 1280-acre unit (3/10-155-96; Williams
24082, Hess, Capa-Bakken, establish an overlapping 1280-acre unit; 1 well, Williams
24083, Hess, Alger and/or Manitou-Bakken, establish an overlapping 2560-acre unit; 2 wells; Mountrail
24084, SM Energy, Dimmick Lake and/or Siverston-Bakken, establish 3 overlapping 2560-acre units, 1 wells each; authorize up to 11 wells on each of two 1280-acre units; McKenzie
24085, Oasis, SWD
24086, Murex, flaring
24087, Murex, flaring
24088, Petro Harvester, pooling
24089, Petro Harvester, pooling
24090, Petro Harvester, pooling
24091, Petro Harvester, pooling
24092, Petro Harvester, pooling
24093, Petro Harvester, pooling
24094, Petro Harvester, pooling
24095, Petro Harvester, pooling
24096, American Eagle, pooling
24097, SM Energy, pooling
24098, SM Energy, pooling
24099, SM Energy, pooling
24100, SM Energy, pooling
24101, SM Energy, pooling
24102, Hess, Alkali Creek-Bakken, 12 wells on a 1280-acre unit (26/35-154-94), Mountrail, McKenzie
24103, Hess, pooling
24104, Hess, pooling
24015, Hess, pooling
24106, Hess, pooling
24107, Hess, pooling
24108, Hess, pooling
24109, Hess, pooling
24110, Hess, pooling
24111, Hess, pooling
24112, Hess, pooling
24113, Hess, pooling
24114, Hess, pooling
24115, Hess, pooling
24116, Hess, pooling
24117, Hess, pooling
24118, Hess, pooling
24119, BR, Elidah-Bakken, 8 wells on a 1280-acre unit; McKenzie
24120, BR, Pershing-Bakken, 22 wells on a stand-up 2560-acre unit (29/32-150-96, 5/8-149-96), McKenzie; see stand-alone post on this case;

24121, BR, pooling
24122, BR, pooling
24123, BR, pooling
24124, BR, pooling
24125, BR, pooling
24126, BR, pooling
24127, BR, pooling
24128, BR, pooling
24129, BR, pooling
24130, QEP, pooling
24131, QEP, pooling
24132, QEP, pooling
24133, HRC, commingling
24134, Luff Exploration, pooling

Thursday, June 25, 2015

22837, cont'd
22988, cont'd
22646, cont'd
23425, cont'd
24002, cont'd
24003, cont'd
24004, cont'd
24005, cont'd
24135, Corinthian Exploration, Boundary Creek-Spearfish, proper spacing, Bottineau
24136, Fram Operating, Nailor Trust, temporary spacing, Renville
24137, Samson Resources, Blooming Prairie-Bakken, establish an overlapping 2560-acre unit; 1 wells; multiple wells; Divide
24138, Samson Resources, Blooming Prairie-Bakken, establish an overlapping 2560-acre unit; 1 well, Divide
24139, XTO, Banks and North Tobacco Garden-Bakken, reduce minimum setbacks, McKenzie
24140, XTO, Siverston-Bakken, reduce minimum setbacks, McKenzie
24000, cont'd
24141, SHD, Deep Water Creek-Bakken, establish an overlapping 2080-acre unit; establish an overlapping 4160-acre unit; 3 wells on each, Dunn, McLean
24014: cont'd
24015: cont'd
24016, cont'd
24142, Resonance Exploration, authorization to drill vertical wells in Westhope-Spearfish/Madison, Bottineau
24020, cont'd
23922, cont'd
24143, waste treatment plant
24144, waste treatment plant
23646, cont'd
24145, Cynosure Energy, Glenn Paetz, temporary spacing, Mountrail
24146, waste treatment plant
24147, treating plant
24148, treating plant
23800, cont'd
23802, cont'd
23981, cont'd
24030, cont'd
24063, cont'd
24064, cont'd
24149, Peregrine, pooling
24150, Basin Shale, pooling
24151, Basin Shale, pooling
24152, Peregrine, Hay Draw-Bakken, 3 wells on an existing 1280-acre unit, McKenzie
24153, Basin Shale, pooling
24154,  Basin Shale, pooling
24155, Basin Shale, pooling
24156, Basin Shale, pooling
24157, Basin Shale, pooling
24158, Basin Shale, pooling
24159, Triangle, pooling
24160, Samson Resources, pooling
24161, Crescent Point, pooling
24162, Zavanna, pooling
24163, Zavanna, pooling
24164, Zavanna, pooling
24165, Slawson, pooling
24166, Slawson, pooling
24167, Slawson, pooling
24168, Abraxas, North Fork-Bakken, 15 wells on an existing 1280-acre unit; McKenzie
24169, CLR, commingling
24170, CLR, commingling
24171, CLR, commingling
24172, CLR, commingling
24173, CLR, commingling
23452, cont'd
24055, cont'd
24053, cont'd
23826, cont'd
24174, SWD
24175, SWD
24176, SWD
24177, SWD
24066, cont'd
24178, SWD

Blame It On Winter -- May 29, 2015

Updates

Later, 6:32 p.m. CT: President Obama sets another record. 
 

Original Post

The New York Times suggests that this past winter was partly the reason for the contraction:

While statistical quirks and one-time factors like wintry weather in some parts of the country played a role, as did a work slowdown at West Coast ports, the lackluster report for January, February and March underscores the American economy’s seeming inability to generate much momentum.

Two comments:

• global warming
• winters tend to come every year 

"Wintry weather" in some parts of the country in January? LOL. In some parts of the country? LOL.

That "work slowdown" at West Coast ports? Hardly noteworthy. 

But to suggest that the contraction bothers the president is crazy. A president's legacy is not shaped by the economy -- especially one quarter. Unless there's a recession. Unless there's a recession after a gazillion dollars in stimulus.

But after a gazillion dollars in stimulus finally worked its way through the economy, we end up with tea leaves suggesting a recession. Remember: two successive quarters of contraction has been the traditional definition of a recession. GDPNow forecasts a further contraction in 2Q15.

That's why Janet Yellen is looking to revise the way GDP is calculated, but I don't think the Fed can move that fast to change things by July 30, 2015, the date for advance estimate of GDP for 2Q15.

*************************

White House Version

This is from the White House:

The first-quarter slowdown was the result of harsh winter weather, tepid foreign demand, and consumers saving the windfall from lower oil prices.  

Harsh winter weather? Winter comes every year and this year was another year of global warming according to the West Wing.

Tepid foreign demand? We rely on foreign demand to grow the economy? I thought it was all about minimum wage workers at McDonald's.

Saving the windfall from lower oil prices? Saving -- most Americans who saw any "windfall" were living month-to-month and were spending any money not spent on gasoline.

Another month of contraction, and it's a recession by the traditional definition.

This is simply hogwash. But you have to give them credit for trying.

The March, 2015, Crude Oil Import Numbers Are Finally "Out" -- May 29, 2015

Updates

Later, 2:04 p.m. CT: this is a most interesting day. The stock market has had a very bad week; down 200 points one day earlier this week, and then down another 120 points today. My hunch: RECESSION talk. Revised 1Q15 GDP shows significant contraction -- almost 1% -- and the "excuses" were laughable: a harsh winter, folks not spending money saved on cheap gasoline, and foreigners not buying US products. The "market" saw right through those laughable excuses.

Oil is more interesting. Up almost 5%. And this occurs almost the same week that Iraq said that it was going to flood the market with crude oil and OPEC gave Iraq "high fives" all around. I can only assume the price of oil went up 5% due to financial and economic factors of which I understand nothing. However, if one looks at the data below, the 5% rise makes all kind of sense.   Remember, this data came out late yesterday / early today (depending on when you found the data) and within hours oil rose 5% -- one of the biggest jumps ever.

Possibly the 5% rise in the price of WTI has to do with the ethanol announcement by the EPA.

A reader tells me (4:00 p.m. CT) that it's due to the rig count going lower. That's very possible; North Dakota active rigs tied a post-boom low, I believe: 80.

Data from Baker Hughes showed that the number of oil rigs fell by 13 to 646, the lowest level since August 13, 2010.

The tally of combined oil and gas rigs fell by 10 to 875, the lowest since January 31, 2003. Last week, the oil rig count fell by just one, the slowest pace in 24 weeks.

The price of West Texas Intermediate crude has rallied from the year-to-date low it reached in May. Following the data on Friday, it jumped as much as 4%, back above $60 per barrel. 

The reader appears to be correct.

This is so prescient, posted back on August 8, 2013: the Bakken could threaten the future of OPEC.

Original Post

Finally, the March, 2015, numbers are out.

Saudi oil imports into the US:

For all their talk about losing market share, Saudi oil imports into the US in March, 2015 (most recent data available) almost matches that of March, 2010, and March, 2011. The US economy contracted by 0.7% in 1Q15 -- a  very inconvenient truth. 


Total crude oil imports into the US:

I suppose I'm missing something, and I suppose I'm the only one, but it seems all this talk about decreasing imports is a bit overdone. Of course, the data is old, back to March, 2015, and this is already June (almost) but look at the numbers (and note that March is not exactly the high driving season in the US):

• total crude oil imported to US jumps from 276 million bbls to almost 300 million bbls over past six months
• OPEC imports jump from 81 million bbls to almost 88 million bbls over same period
• Saudi Arabia imports back up to 32 million bbls after drop to 26 million bbls six months ago
• Venezuela is hanging in there
• Angola drops significantly (for that country, not for the US)
• Nigeria rises significantly (for that country, not for the US)

The country that plans to "flood the market with crude oil" took the biggest US import hit: Iraq.

Saudi crude oil imports into US in graphic form:

Saudi blames the plunge in market share in late 2014 to US shale. How then do we explain the same drop in 2012 - 2013, and then the subsequent rise back to almost the 50-million-bbl line in 2014? Throughout that entire period, from 2011 on, US shale oil production was increasing significantly. 

I still maintain that "we're" being set up for a price spike before the end of 2017. Saudi is not going to continue giving their oil away at $60; and, off-shore CAPEX won't turn on a dime.

But regardless of where the price of oil ends up, there is no question:

a) we're not running out of oil; and,
b) global appetite is insatiable

US Oil Production Hits 43-Year High -- May 29, 2015

Huge housing promotion this weekend in Williston. The Dickinson Press is reporting:

An onslaught of housing is set to hit the booming Williston housing market with more than 2,126 units coming online this year. Amid that crush, the principal investors behind Eagle Crest Apartments are hoping to make not just an entrance, but a grand one.

For their opening ceremonies from 11 a.m. to 6 p.m. CDT Saturday and noon to 5 p.m. Sunday, the Paul Sawtell Quartet, a professional jazz ensemble being flown in from Seattle performs, and organizers are bringing in vintage automobiles and tractors from a couple of car clubs in Canada.

The development is at 3710 26th Street West.

 Hopefully, the Google map is incorrect:

I assume the location is at least approximately correct, but one wonders about the designation of 26th Street West running straight south from 32nd Avenue West. 

Eagle Crest includes 168 units in five buildings, 20 percent of which are affordable units for families with an income cap of about $35,000 for a family of four.
The low-income family units are already filled.

And the building continues:

The principals of this development will turn next to the Hawkeye Village project, Sessions said, a 160-acre development that includes 168 single-family dwellings as well as 57 duplexes.

************************************ 
US Economy Shrinking

US economy shrinks in 1Q15. GDP revised from expectations in December as high as 2.9% growth for 1Q15, down to a minus 0.7%. Market Watch is reporting:

Businesses invested more in equipment than initially estimated, but spending on structures such as oil rigs fell precipitously. 

I guess if you remove the oil and gas statistics, the economy is doing very, very well. Nowhere to go but up from here. More at this early morning post.

It looks like the government is getting ready to "massage" the data; they say the economy is doing much better than what the numbers show. Reuters is reporting:

Economists, however, caution against reading too much into the slump in output. They argue the GDP figure for the first quarter was held down by a confluence of temporary factors, including a problem with the model the government uses to smooth the data for seasonal fluctuations.

Economists, including those at the San Francisco Federal Reserve Bank, have cast doubts on the accuracy of GDP estimates for the first quarter, which have tended to show weakness over the last several years.

By this time next year, the Fed will have revised how they calculate GDP.  Just in time for the presidential election.

**********************************

Active rigs:

	5/29/2015	05/29/2014	05/29/2013	05/29/2012	05/29/2011
Active Rigs	81	187	183	218	172

RBN Energy: use of drones in the oil industry.

US oil production hits 43-year high. CNBC is reporting:

U.S. oil production surged to a 43-year high, despite a price war that resulted in a more than 50 percent reduction in active U.S. oil wells.

The Department of Energy reported a draw down in crude inventories of 2.8 million barrels for the week ended May 22. 

The DOE also reported that U.S. production rose to 9.566 million barrels per day, surpassing the previous peak of 9.422 million set in March. While no weekly data is available beyond 1983, the production number is the highest, if translated to a monthly basis, since May 1972.

***********************************

Fleeing California

Broadcom exits southern California. The Los Angeles Times is reporting:

Irvine chip maker Broadcom Corp. is the latest of many corporate headquarters to exit Southern California, leaving the business community puzzling over the causes and effects.

The technology stalwart — set to be sold for $37 billion in cash and stock to semiconductor rival Avago Technologies — launched in Santa Monica in 1991 and then moved to Orange County in 1995.

After Thursday's transaction, the company will be incorporated in Singapore, mostly for tax reasons, but its principal operating headquarters will be in San Jose. A significant presence will remain in Irvine.

Other defections:

Last year, Toyota Motor Corp. said it would move its sales and marketing headquarters to suburban Dallas from Torrance, and Occidental Petroleum Corp. moved its headquarters from Los Angeles to Houston; and Irvine-based Botox maker Allergan Inc, was taken over by Irish firm Actavis and its headquarters eventually relocated to Dublin.

Earlier departures included DaVita Inc., which operates kidney dialysis service centers and decided in 2009 to move from El Segundo to Denver. The next year, Northrop Grumman Corp. said it would jump ship from Los Angeles to Falls Church, VA.

The LA Times says it's just part of "big business."

Yup. And big business is leaving California. 

****************************************

Amtrak Update

We usually see this Amtrak story about every 18 months. Nothing new to see here. The Dickinson Press is reporting. Actually it's a Reuters report re-posted in TDP. The story: the Empire Builder loses money. Washington (DC) debates shutting it down. Won't happen.

IBD Interview With Chevron CEO -- May 29, 2015

It's one-thirty a.m. (1:30 a.m.) central time, Friday morning. I was just getting ready to head for bed when a reader sent me a 3-page article from Investor's Business Daily: Q&A: Chevron CEO Talks Oil Prices and Energy Independence.

It's a very, very good article. I am amazed how calmly these CEOs can talk about these things; they are very, very good at keeping things in perspective.

Some observations (data points from the article and then my comments, or vice versa). Again, I am inappropriately exuberant about almost everything when it comes to the oil and gas industry and an eternal optimist.

Before I get to the article: back in the 70's it appeared to me there was going to be a real shortage of oil, if not energy in general. Now, there is so much energy available that wind farms are being paid not to produce electricity in the US Pacific Northwest.

Perhaps for investors in select sectors, and perhaps for workers in select sectors, things look "bad" in the oil patch. For consumers, things could not look brighter in the US (except in California, as you will see in the article).

So, now the article, and how I read it. 

Question: is the low price of oil "normal" for the US?
Answer: at $60 now, it's going to take somewhat higher prices to justify a lot of incremental drilling activity.

Question: are we running out of oil?
Answer: no.

Question: did the Saudis intentionally drive down the price of oil to put shale oil producers out of business?
Answer: he never really answered the question, but he had a great historical perspective -- 

If you go back 30 years ago, at one point the Saudis cut production from 9 million barrels a day to 2 million. OPEC opened up surplus capacity of 15 million barrels a day that took 20 years to work off. Right now we're not in that situation. We have perhaps 2 million to 3 million barrels a day of surplus capacity.

Question: what does the US need to do to become energy independent?
Answer: "oil, gas, nuclear energy, and the right policies" is what he said; this is what I "heard": "yada, yada, yada." I think the whole issue of the US becoming energy independent is over-rated; a distraction.

Question: how important is it to lift the crude oil export ban?
Answer: we need to export light crude oil and import heavy crude oil. Regular readers of the blog already knew this.

Question: what about pipelines?
Answer: yada, yada, yada.

Question: the climate change issue? 
Answer: some data points --

• US accounts for just 15% of the world's greenhouse gas emissions
• the US has a very energy-efficient economy
• California has an aggressive set of laws (AB 32 and the Low Carbon Fuel Standard)
• California's laws that just went into effect could add $1/gallon to the price of gasoline
• California accounts for less than 1% of global greenhouse gas emissions
• data centers (very energy intense) are not being built in California
• Apple has moved data centers to North Carolina
• Microsoft has moved data centers to San Antonio (Texas)

Question: income inequality?
Answer: yada, yada, yada

Question: EVs?
Answer: ain't gonna happen. 

Miscellaneous comments:

• the words "renewable, wind, solar, hydroelectric, Biden, Pocahontas, or Michelle" were not mentioned by either IBD or by the Chevron CEO
• California, accounting for 1% of global greenhouse gas emissions is enacting legislation like the state accounts for 99% of GGGE
• both Microsoft and Apple are moving data centers out of California
• the Chevron CEO doesn't think the crude oil export issue is worth discussing, which is about how I feel

In the big scheme of things, this interview should be reassuring to everyone in the US -- except those who live in California. If Californians like $5 gasoline, they can look forward to $6 gasoline. And the state will still vote for the wrong party.