Tuesday Night, July 28, 2015

Premium gasoline - regular gasoline spread to increase. Platts is reporting:

Gulf Coast alkylate barges on Tuesday matched a record differential to Colonial Pipeline gasoline in a market reacting to driver demand and refiners holding onto their blendstocks.

Alkylate is used to boost octane for premium gasoline and reduce RVP for summer fuels. High-octane gasoline has seen strength this week in the Gulf Coast and Midwest gasoline markets on a scarcity of alkylate.

Platts assessed alkylate at maximum 5.5 RVP at 65 cents over pipeline gasoline for loading August 5, tying the record set on six days in February 2013. The assessment was based on a heard Gulf Coast barge trade completed late Monday.

"... a market reacting to driver demand..." I'm looking for US gasoline demand to set a new record this August, 2015.

Past posts on alkylate:

• February 14, 2013: RBN Energy introduces me to alkylate
• July 21, 2015: unintended consequences of Bakken shale + high gasoline demand

When you read these three posts (the current one plus the two linked ones), think Keystone.

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

Tweeting Now

Tweeting now: scores of felons and illegal aliens are streaming into local Los Angeles County sheriff offices and Los Angeles City police departments after LA City council bans large-capacity ammunition magazines. Or not.

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

Tweeting Not

Tweeting now: they had to shut down the wind turbines because of high sustained winds. Over 50 mph, wind turbines need to be shut down. Thank goodness for coal. Or not.

Seven (7) New Permits -- North Dakota, July 28, 2015

Take a look at the huge IPs being reported by QEP today, and then take another look at the Mike Filloon article yesterday. Link for notes here.

Tomorrow another P Wood well comes off the confidential list. I track the P Wood wells here.

Twin Valley is tracked here.

Wells coming the confidential list Wednesday:

• 28409, 2,210, Whiting, P Wood 154-98-4E-26-35-14H, Truax, t1/15; cum 56K 5/15;
• 29049, 1,560, BR, Tetonorman 1-1-3UTFH ULW, Johnson Corner, t6/15; cum --
• 29291, 482, CLR, Annapolis 7-29H, Dollar Joe, t3/15; cum 25K 5/15;
• 30090, SI/NC, BR, CCU Dakota 6-8-17MBH, Corral Creek, no production data,
• 30091, SI/NC, BR, CCU Dakotan 7-8-17TFH, Corral Creek, no production data,
• 30341, drl/NC, XTO, Lundin 14X-33A, Siverston, no production data,

Active rigs:

	7/28/2015	07/28/2014	07/28/2012	07/28/2011	07/28/2010
Active Rigs	73	193	207	181	139

Seven (7) new permits --

• Operators: Whiting (4), EOG (2), Crescent Point Energy
• Fields: Twin Valley (McKenzie), Antelope (McKenzie), West Ambrose (Divide)
• Comments: the Whiting permits are for a 4-well pad in Twin Valley;

Ten (10) producing wells completed:

• 27780, 2,244, QEP, TAT 2-35-26H, Grail, t7/15; cum --
• 27781, 2,055, QEP, TAT 1-35-26TH, Grail, t7/15; cum --
• 27782, 2,045, QEP, TAT 1-35-26BH, Grail, t7/15; cum --
• 28460, 2,032, QEP, TT 4-35-26TH, Eagle Nest, t6/15; cum --
• 29112, 805, Hess, EN-Uran A-154-93-2215H-9, Robinson Lake, t7/15; cum --
• 29394, 2,199, QEP, TAT 5-35-26TH, Grail, t7/15; cum --
• 29555, 1,497, CLR, State Weydahl 4-26H1, Corral Creek, Three Forks B1, t7/15; cum --
• 29604, 657, Hess, GN-Helen M-158-96-3229H-1, South Meadow, t7/15; cum --
• 29605, 97, Hess, GO-Kupper-157-96-0508H-2, Ray, t6/15; cum --
• 30276, 558, Hess, GO-Perdue-157-97-0112H-5, Ray, t7/15; cum --

Whiting (4) and Hess (3) add seven more "plugged or producing" wells to the confidential list.

Random Update On Some NDIC Statistics -- July 28, 2015: Oh-Oh - US Consumer Confidence Just Tanked

NDIC has added another data page: the number of active rigs by month by county by operator. At this link, click on "Rig Statistics."

After hitting a recent high of 105 bopd on average from all wells in North Dakota, the number has slipped back to 98, under current price slump.

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

Heat Map For The Bakken

Posted back on December 27, 2014, this is the heat map for the Bakken.

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

NOAA's Fake Heat Map

Speaking of "heat," more evidence of global warming fudged data by NOAA. 

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

EIA's Daily "Energy Cookie"

EIA:

Russia is a major producer and exporter of oil and natural gas, and its economy largely depends on energy exports. Russia was the world's largest producer of crude oil including lease condensate and the third-largest producer of petroleum and other liquids (after Saudi Arabia and the United States) in 2014, with average liquids production of 10.9 million barrels per day. Sanctions and lower oil prices have reduced foreign investment in Russia's upstream, especially in Arctic offshore and shale projects, and have made financing projects more difficult. However, these sanctions will have little effect on Russian production in the short term as these resources were not expected to begin producing for 5 to 10 years at the earliest. --- EIA 

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

Intermittent Energy

By the way, take a look at this PDF. In all such presentations, to make renewable energy look "bigger" than it really is, the graphic designers and analysts lump solar and wind energy with hydroelectric power (like the Hoover Dam). The amount of hydroelectric power dwarfs whatever energy that is provided by solar and wind energy. But much more important is this little bit of trivia, an inconvenient truth: hydroelectric power is continuous and dependable. Wind and solar is intermittent and not dependable. Wind and solar energy needs conventional energy back-up; hydroelectric power does not.

By the way, installed capacity of the Hoover Dam: 2,080 MW. At $5 million / MW, it would take only $10 billion to build a solar farm to provide that much energy, assuming one could find enough land to build a solar farm that big, and, oh, by the way, that solar farm would still require the Hoover Dam to back it up during the night and during cloudy days. Renewable energy = intermittent energy = redundant energy = very expensive energy.

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

Oh-Oh

Reuters is reporting:

U.S. consumer confidence took its biggest tumble in four years in July on a less upbeat jobs outlook, while home appreciation in major cities stalled in May, suggesting a spring pause in housing demand.

The disappointing data comes as Federal Reserve policymakers meet to consider whether the U.S. economy is strong enough to warrant an end to the Fed's near zero interest rate policy, perhaps as soon as September.

The Conference Board, an industry group, said on Tuesday its index of consumer attitudes fell to 90.9 this month from a downwardly revised 99.8 in June. It fell far short of a forecast reading of 100.0.

The latest figure was the lowest since September 2014, while the decline was the steepest since August 2011. The report's jobs hard-to-get index rose to 26.7 from June's upwardly adjusted 26.1. 

I assume the poll was taken minutes after Hillary's last speech.  

Meanwhile, GDPNow: The final GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2015 was 2.4 percent on July 27, unchanged from July 17.

Accompanying the article is a photo of a family eating in a New York restaurant ... on September 17, 2012. Must have been the writer's family and his birthday.

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

A Note to the Granddaughters

After many, many cross-country trips between Texas (either south Texas [San Antonio] or north Texas [DFW]) and Los Angeles, California, in which we made the side trip to Santa Fe, New Mexico, only once, Santa Fe is back on my list of things to do next summer.

I haven't discussed this yet with May but she asks about visiting Santa Fe every time we make the trip. So, next summer, I plan to leave a week earlier than usual for Los Angeles, and use that week to make a side trip to Santa Fe. Each month between now and next June, I will put $150 into an envelope marked "Lodging for the Santa Fe Trip, 2015." Let's say that's eleven months, and thus eleven nights of lodging -- but we will only need four or five nights of such lodging, so ....

The decision was made while reading The Harvey Girls (see below).

For those interested in touring the southwest, or the Grand Canyon, this is where I would start:

• The Harvey Girls: Women Who Opened The West, Lesley Poling-Kempes, c. 1989
• Mary Colter: Architect of the Southwest, Arnold Berke, c. 2002
• Mary Colter: Builder Upon the Red Earth, Virginia L. Grattan, c. 1992 
• Appetite for America: Fred Harvey and the Business of Civlizing the Wild West, One Meal at a Time, Stephen Fried, c. 2010
• Unreal City: Las Vegas, Black Mesa, and The Fate of the West, Judith Nies, c. 2014
• Route 66: Main Street USA, Nick Freeth, c. 2001, coffee table glossy hardcover
• A Naturalist's Guide to Canyon Country, David B. Williams, c. 2013

I would read The Harvey Girls last. What an incredibly good book.

If I had time to read only two books, it would be The Harvey Girls and Grattan's biography of Mary Colter.

Mary Colter: Architect of the Southwest, Arnold Berke
Books on regional "color" are generally "hit or miss." The Harvey Girls is clearly a "hit." It's an easy read, but wow, the amount of history crammed into a relatively small book.

One bit of trivia. Although the destination was Santa Fe, the Santa Fe rail line from Topeka, Kansas, never made it to Santa Fe. From The Harvey Girls:

Coming from the north and Raton Pass, the Santa Fe directed its tracks toward the city of Santa Fe, where it seemed logical enough to create a major stop. But it was not to happen this way. The Atchison, Topeka and Santa Fe Railway never laid its main track into its namesake.

There are to supposed explanations for this: one claims that the citizens of Santa Fee supported a rival railroad before the Santa Fe was established in New Mexico, and that the Santa Fe later snubbed the little city, laying its main line substantially east of her; the other story claims that the the city of Santa Fe made an all-out effort to secure the railroad's consideration, but lost after the railway's surveys showed the route would be too mountainous. When the main line could not be laid into Santa Fe, a spur was promised, completed on February 16, 1880.

In 1880, Lamy, New Mexico, was the site chosen as the junciton from which a spur track from the main line would be laid into Santa Fe. Lamy became a town overnight. Fifteen miles southeast of Santa Fe, in the foothills of the Sangre de Cristo Mountains, the Santa Fe Railway built maintenance yards, section crew housing, and a depot and Harvey House. Lamy never boasted more than three hundred residents, but in 1910, it had the "oasis in the desert," El Ortiz Harvey House.

North Dakota Wells, A Comparison Between June, 2014, And June, 2015 -- John Kemp

John Kemp is tweeting some North Dakota data. There are two huge data points (at least) in this graph:

Memo to self: send this graph to Jane Nielson.

John Kemp also provided a breakdown of the IPs for wells completed in North Dakota between June 2014 and June 2015. This would include a very small number of non-Bakken wells which generally have IPs at the far left. The table below: the column to the left is the number of bopd flow, IP; the second column is the number of wells that reported an IP as indicated between June 2014 and June 2015:

Number of wells: IP <

• 100: 23
• 200: 23
• 300: 33
• 400: 40
• 500: 52
• 600:73
• 700: 92
• 800: 68
• 900: 65
• 1000: 58
• 1100: 60
• 1200: 55
• 1300: 58
• 1400: 50
• 1500: 48
• 1600: 28
• 1700: 39
• 1800: 25
• 1900: 33
• 2000: 35
• 2100: 37
• 2200: 30
• 2300: 29
• 2400: 21
• 2500: 18
• 2600: 17
• 2700: 4
• 2800: 12
• 2900: 4
• 3000: 11
• 3100: 8
• 3200: 5
• 3300: 3
• 3400: 3
• 3500: 3
• 3600: 3
• 3700: 2
• 3800: 2
• 3900: 2

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

Percentage Across Ranges

0 - 500:  171 =  15%
600 - 900: 298 = 25%
1000 - 1200: 173 = 15%
1300 - 1500: 156 =13%
1600 - 2000: 160 = 14%
2100 - 2500:  135 = 12%
2600 - 3000:  48 = 4%
3100 - 3900: 31 = 3%
____________________

Total: 1,172

It appears that 60% or more of North Dakota wells, including some very small Madison and Spearfish wells, a a few dry wells, had an IP of 1,000 bopd or greater.

Note: the numbers come my reading of the graph. Obviously, my reading is not perfect, and I often make simple arithmetic errors. 

Tuesday, July 28, 2015 -- Part IV

Rigzone is reporting: European majors are getting meaner, leaner.

Statoil ASA and BP plc revealed Tuesday, through their separate second-quarter results, that they are reaping the benefits of cost cutting programs across their respective operations. In its 2Q statement, Statoil claimed that it has maintained a “strong capital structure” and stated that net debt was reduced in the quarter. The company’s adjusted net income of $881 million was 22 percent ahead of consensus estimates, according to investment bank Jefferies, who also stated that Statoil’s “Norwegian Continental Shelf results were robust while trading once again appeared strong”.

Statoil’s capital spending was reported to be $7.8 billion in the first half of 2015 and this figure is now expected to hit $17.5 billion for all of 2015, instead of $18 billion, due to the effects of an ongoing efficiency program. Statoil also increased its production of hydrocarbons during 2Q 2015 by four percent, compared to the same period last year. The rise, which boosted production to 1.873 million barrels of oil equivalent per day in the second quarter of 2015, was partly due to “lower maintenance compared to the second quarter of 2014”, according to Statoil. As part of Statoil’s cost-cutting measures, the company has previously announced that it could fire up to 1,500 employees by the end of 2016 and stated that it will be streamlining its operating model in order to become “fit for the future”.

For BP:

BP’s results revealed that it too has made “significant strides in reducing controllable cash costs”, according to investment bank Jefferies, which noted BP’s costs were $1.7 billion lower during the first half of 2015 than in 1H14. The savings were a result of BP’s simplification and efficiency programs that were designed to sustainably reduce non-safety-critical cash costs, according to BP’s 2Q results statement. At the end of the second quarter, BP’s net debt was $293 million lower than at the end of the first quarter, which is within the company’s 10-20 percent target band. BP’s upstream segment also reported a profit of $0.5 billion for 2Q 2015.

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

Libya, Where Hope Springs Eternal

Platts reports that Libyan crude oil dropped from a paltry 430,000 bopd to an even-worse 366,000 bopd. And, of course, that's Libyan figures, so one wonders what the real number was. However, hope spring eternal:

[NOC chairman] has said that Libyan oil production could be boosted to as much as 1 million b/d if NOC successfully negotiated a restart of the fields with protesters blockading the nearby pipeline infrastructure.

Tuesday, July 28, 2015 -- Part III

I have said from the beginning that Tesla is a battery company disguised as a car company surviving on government subsidies and mandates.

I guess we got a bit more proof of that today, with this headline over at The Street: Tesla Tanks As GE Eyes Energy Storage Role.

This is not an investment site. Do not make any investment decisions based on what you read here or what you think you may have read here.

By the way, based on many, many articles about GE over the past year, it appears GE has gotten its act back together, is on a roll, and will be a powerhouse of an energy company in the US and in France, of all things, by 2020.

The market today, with 3 - 5% rise in share prices in the energy sector show just how fast things can change.

For investors, the change in the price of shares will start showing up about six months before we see the demand for oil catch up with the supply of oil. 

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

For The Archives: Politics

Updates

July 30, 2015: The National Journal agrees -- it's Biden's moment. 

July 29, 2015: Trump is now saying the same thing -- Hillary will flame out and Biden's star will rise.  

Original Post

 

I am/was ambivalent about posting this. This is an e-mail note I sent a reader with regard to some political story last week. As I wrote it, I wrote it thinking I might post it sometime. This note, of course, is not ready for prime time, but I don't want to lose it, so will post it (pretty much as originally written with some editing) for archival purposes, and then add some stuff on the end.

Oh, yes, now I remember. It was in response to the article suggesting that the White House is beginning to undermine Hillary's campaign:

Yes, that was an interesting story. I've thought about it a lot.

Each succeeding president may / may not destroy the preceding president's successes; may / may not re-write history of the former president.

1. When Bush left office, Iraq may or may not have survived as a success story. It probably would have turned out the way it did, regardless. However, Obama made sure Iraq imploded and Bush's legacy (a free, democratic, thriving Iraq) is dust. Obama made sure of that. Along the way, Jarrett took over, and made Iran the Mideast superpower.

2. Obama has very, very weak legacies in the making: ObamaCare, the Iran nuclear deal, global warming, etc. He very, very badly needs a successor to shore up his weak legacies. His only hope is a Democrat winning. If he orchestrates the implosion of Hillary, the GOP wins, almost by default without much of a battle.

3. Unless.

4. Unless there's an Obama knight-in-waiting. Obviously it's not going to be Sanders. And we haven't heard much from O'Malley. It is interesting that the Drudge headline (I did not read the story at the link) today is Biden: in or out. Biden would most likely keep the entire Obama staff in their various bureaucracies and replace them with his own cronies only as necessary. Jarrett might even stay. Biden would do what he could to save the Obama legacies. Only problem: age. Well, actually a second problem: old white guy. Well, actually a third problem: a buffoon. [There's only one greater buffon in Washington, right now, at a similar level of power: Boehner.]

5. Having said that, both Hillary and GOP need to fear Biden. In Obama's eyes, even if Biden lasted only one term (due to age, health) that would be enough time for him to save Obama's legacies -- think LBJ following JFK.

6. An aside: I will be irritated if Congress does not put Hillary under oath when she comes to testify. Even if "under oath" vs not being "under oath" before Congress is a fine line, just knowing that she has raised her right hand to swear to tell the truth will make her very, very cautious in her answers. A lot of "I never intentionally...." "I don't recall the specifics, but I never knowingly lied ..." Etc. etc.

7. It's also very possible, the IG investigation will go nowhere; this was simply a leaked threat to keep her in line.

8. The primary system of nominating candidates really challenges the Dems this time; if we had the pre-60's convention nominating process, it is very, very likely a charismatic Democratic governor -- somewhat centrist -- would steal the show on the second or third ballot, but now candidates have to put together a winning primary race starting months early.

9. The GOP is screwed if Trump goes nuclear -- third party option.

So, the added comments:

1. Regarding #7 above: that appears to be a hoax of a story. It is now being reported there never was any intention of this administration to sic the IG on Hillary.

2. To win the presidency, actually to win anything, one needs to peak at the right time. Even in soccer, the US Women's team needed to peak at exactly the right time. For Hillary, she peaked before she became SecState; perhaps she peaked as the junior senator from New York, much like the junior senator from Illinois, though his star kept rising. She may have peaked when "she stood by her man."

3. The Planned Parenthood's "Josef Mengele-like research" story appears to have some legs to it and the fact that Hillary has not yet distanced herself from at least the part about working to minimize the crunchiness will cause her great problems. I don't think mainstream America has problems with what are analogous to miscarriages in the first trimester, but when talking about crunchy skulls, that is beyond the pale. And the videos are going to keep coming.

4. It looks like the Dems are coming down to this -- Hillary, fading; Biden, goofball; Kerry, a legend in his own mind and his star is rising. Kerry will get the Nobel peace prize next year, right as the presidential campaign gets into full swing.

5. For the GOP: the best debates since the Reagan candidacy. One-on-one, Trump will destroy any other candidate in a debate -- even if he makes no sense.

6. For the networks: hoping beyond all hope, Trump will win the GOP nomination. The ratings for the presidential debates will set new records.

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

$200 Oil

I've posted it before but just to reiterate: when I suggest "they" are setting us up for "$200 oil," I don't mean "literally" that oil will go to $200. I am suggesting that when the demand catches up to supply, and the price heads back to $100 fairly quickly, pundits and talking heads will start talking crazy talk, they will start talking about $150 oil, $200 oil, etc.

The data points and graphs that haunt me day-in, day-out:

1. The graph of Saudi oil production over the past five years, despite a 5-year, $35-billion expansion of its drilling program and an all-time high of active rigs in the Mideast.

2. The fact that $200 billion (maybe more) and at least 45 projects have been canceled, deferred, scrapped, whatever in the past six months, and most of these projects have been off-shore projects that take six to seven years to get on-line.

3. The end of the second quarter 2015: North Dakota hits 68 active rigs, a post boom low. Early in the 3Q15, North Dakota back to 73 active rigs.

4. Oil companies planning to add 80 million bbls of new crude oil storage capacity along the Texas-Louisiana coasts this year alone (for perspective, Cushing holds 150 million bbls). The storage facilities in Texas/Louisiana are around 300 million bbls of crude oil.

5. Nigeria, a huge exporter of crude oil, may be the first Saudi-engineered casualty of the oil wars.

6. Besides off-shore projects being deferred / canceled / scrapped, the current off-shore plays in the North Sea are showing their age. Brazil and Mexico are both struggling with their off-shore projects.

7. Other than the Permian, Eagle Ford, and the Bakken, most of other shale plays in the US are being ignored.

8. The tsunami of oil hitting the market in 2015 finally tails off in 2016, but will take a good year to "burn off" the excess.

Tuesday, July 28, 2015 -- Part II -- Ford Posts Best Quarter In Its History

This week is the big week for earnings reports from the energy sector. NOV already reported this morning (beat by 13 cents) and SM and RRC will report after the market close. The one I'm really interested in is Hess tomorrow. I don't invest in Hess but it, along with a handful of others, is a bellwether for the Bakken.

This is not an investment site. Do not make any investment decisions based on anything you read here or think you may have read here.

Ford, from The Wall Street Journal:

Ford Motor Co. said steady demand for pickup trucks and sport-utility vehicles pushed North American second-quarter profit to record levels, helping offset softer conditions in China and continued losses in Europe.

The Dearborn, Mich., auto maker said Tuesday it earned $1.9 billion in net profits during the quarter, a 44% increase compared with the same three-month period a year ago. The auto maker’s operating earnings of 47 cents per share solidly outpaced analyst expectations even as it saw revenue decline slightly to $37.3 billion due to the negative impact of foreign exchange.

Higher vehicle prices, aided by new products and consumer’s deciding to buy bigger vehicles amid low gas prices, helped the company’s core U.S. operation recover after a sluggish performance over the first three months of the year. Although the wider Chinese industry is weakening, Ford posted a record-high 4.6% market share in China and reported a slight profit in the Asia-Pacific region.

I wrote Don, after seeing these numbers:

Pretty incredible. I remember 6 - 12 months ago, pundits wondering if Ford's switch to aluminum was going to kill them, changing horses right in the middle of the production line / production year. 

44% increase year-over-year even better than Apples 38% yoy increase or whatever it was. Cheap, cheap oil (manufacturing costs) / cheap, cheap gasoline for its customers --- people like big SUVs and big pickup trucks.

More from TWSJ:

The results come less than a week after crosstown competitor General Motors Co. said demand for big trucks also supercharged its quarterly results. The U.S. rivals are striving to consistently maintain 10% operating margins in North America, and both companies surpassed that benchmark in the second quarter. 

With the surge in big gas guzzlers (SUVs and big pick-up trucks), the tea leaves suggest the US will hit an all-time gasoline demand record in August, 2015, this year, next month.

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

Paglia: How Bill Clinton Is Like Bill Cosby

From Salon:

Right from the start, when the Bill Cosby scandal surfaced, I knew it was not going to bode well for Hillary’s campaign, because young women today have a much lower threshold for tolerance of these matters. The horrible truth is that the feminist establishment in the U.S., led by Gloria Steinem, did in fact apply a double standard to Bill Clinton’s behavior because he was a Democrat. The Democratic president and administration supported abortion rights, and therefore it didn’t matter what his personal behavior was.

But we’re living in a different time right now, and young women have absolutely no memory of Bill Clinton. It’s like ancient history for them; there’s no reservoir of accumulated good will. And the actual facts of the matter are that Bill Clinton was a serial abuser of working-class women–he had exploited that power differential even in Arkansas.  And then in the case of Monica Lewinsky–I mean, the failure on the part of Gloria Steinem and company to protect her was an absolute disgrace in feminist history! What bigger power differential could there be than between the president of the United States and this poor innocent girl? Not only an intern but clearly a girl who had a kind of pleading, open look to her–somebody who was looking for a father figure.

I was enraged!  My publicly stated opinion at the time was that I don’t care what public figures do in their private life. It’s a very sophisticated style among the French, and generally in Europe, where the heads of state tend to have mistresses on the side. So what? That doesn’t bother me at all!  But the point is, they are sophisticated affairs that the European politicians have, while the Clinton episode was a disgrace.

With regard to Paglia, back in 2010, I posted a note recommending her landmark book.

For those interested in the evoluton of western philosophy and Greek tragedy, there are two books that must be side-by-side in your personal library:

Sexual Personae, Camille Pagula, c. 1990
The Wooden Horse, Keld Zeruneith, c. 2007

Both are large books, best read once through to get an overview, and then to go back and read the portions that interest you most.

Paglia's book is a landmark book that covers the "art and decadence from Nefertiti to Emily Dickinson." To fully appreciate Sexual Personae one must be quite familiar with western literature.

The Wooden Horse is a comprehensive review of the evolution of human thought from Homer to Socrates. It really is very, very good. I think The Wooden Horse is a more scholarly book, but that is subject to debate.  The author is much more linear in his approach and thus easier to follow than Paglia's work. 

Tuesday, July 28, 2015 -- Good Morning, Texas! The State Is On Track To Beat 1972 Oil Production Record

As promised, here is the fifth of several photos that will be posted over the next several days. The first batch of photos will be of the Statoil Trust wells a few miles west of Williston. This 5-well pad is just east of another 4-well pad in the same section.

Active rigs in the Bakken:

	7/28/2015	07/28/2014	07/28/2012	07/28/2011	07/28/2010
Active Rigs	73	193	207	181	139

RBN Energy: an update on the global LNG market. 

Given all that’s going on in the energy world, it’s not surprising to see the international LNG market in a state of flux. Consider this: Demand for LNG has plateaued in Asia (by far the largest market for LNG, led by Japan and South Korea) due to a combination of milder-than-normal weather, slower economic growth, renewed competition from nuclear, and lower-cost power from oil and coal. Also, the biggest Asian growth markets (China and India) are looking to pipe in natural gas from their neighbors (Russian/Siberian gas into China, for instance) as a lower-cost alternative to LNG. Europe, meanwhile, is concerned about relying too heavily on piped-in gas from Putin’s Russia, and is considering its gas-supply options too—including, as of late, piped-in gas from Iran. All of this comes as a flood of new liquefaction/LNG export capacity is poised to enter commercial operation (most of it in Australia and the U.S.; see blue and lime-green layers in Figure 1), and as major LNG consumers are trying to move away from long-term LNG supply deals indexed to oil prices and toward shorter-term and spot deals, prices tied to spot natural gas (as U.S. LNG exporters are offering), and—very important—“destination flexibility” to allow LNG to be shipped wherever the liquefaction off-taker wants.

here’s a lot we can say for sure about the LNG market. For instance, we know that, in anticipation of growing demand, a lot is being invested in developing new gas-liquefaction and LNG export capacity, most of it in Australia and the U.S. Barring some kind of market meltdown (which is very unlikely), these projects will be completed and become operational, on or close to schedule (though a few in Australia are running late). Another thing we know is that while the long-term outlook for growth in LNG demand remains bullish, in the past couple of years LNG demand growth has been taking a breather of sorts (for the mild-weather, weak-economy and other reasons cited above). Because the investments in new liquefaction/export capacity were based upon the expectation of uninterrupted growth in LNG demand, the market is now starting to experience a yawning gap between supply (too much) and demand (lagging) that may well widen over the next five years as capacity additions continue to outpace demand growth. This has resulted in a market very favorable to those buying LNG on the spot and short-term markets, who have been enjoying LNG spot prices of less than $8/MMbtu. LNG purchased under long-term Sales and Purchase Agreements (SPAs) indexed (as most are) to crude oil prices also costs less now, of course, with oil selling for only $50/Bbl or so, but still is priced at a premium to spot.  

As you might guess, Qatar’s got it all: lots of cheap gas, low-cost infrastructure and easy access to both Asia and Europe, and a head-start in the LNG trade. Australia’s got a lot too, but its liquefaction costs are relatively high (its liquefaction/export capacity, sited in remote locations and “greenfield” in nature, has been costly to develop and very susceptible to cost overruns), and while the Land of Oz has easy access to Asia (and a shipping-cost advantage over the U.S. in that market—at least until the first West Coast LNG export terminal is built), its access to Europe is much less favorable than Qatar’s or the U.S.’s.

As we said, the liquefaction/LNG export terminals now under construction in the U.S., Australia and elsewhere will get built, and, with the 2014-15 lull in LNG demand growth, it may take until the early 2020’s for the wave of new capacity coming online over the next three or four years to be absorbed by incremental demand from China, India and other growing markets. That near- and mid-term supply/demand disconnect will keep spot and short-term LNG prices low, and make LNG traders and consuming utilities a bit wary of making new take-or-pay liquefaction commitments, at least for capacity that would come online before, say, 2021 or 2022. Again, it seems likely that U.S. liquefaction/LNG export projects (a dozen or more of which are on deck) would have an edge in meeting that incremental demand because of their ability to provide the full package of competitive advantages.

Much, much more at the link for those folks interested in natural gas. 

FuelFix is reporting: Texas on track to beat 1972 oil production record.

Texas remains on track to produce a record amount of crude despite the lingering downturn that’s shut down rigs and spurred oil companies to lay off tens of thousands of workers.

Even as oil companies pare their spending budgets and pull back from some drilling activity, production in Texas has continued surging toward all-time highs, said Karr Ingham, an economist for the Texas Alliance of Energy Producers, at his twice-per-year assessment of the state’s oil industry on Monday.

Statewide oil output is expected to reach 1.28 billion barrels this year, exceeding the state’s record of 1.26 billion barrels set in 1972.

The resiliency of the state’s production numbers came as a surprise to Ingham, who had expected output to fall along with oil prices. Last July, before crude collapsed, Ingham predicted that Texas would break its 1972 record within two years.

After prices declined and hundreds of rigs were idled, Ingham began to doubt his forecast. But producers have continued to wrangle more oil from the ground than they did a year ago, with output in Texas ticking up 17 percent from the same time last year.