Thursday, October 1, 2015

Some Housekeeping: Walmart's New Hours In Williston, North Dakota -- October 1, 2015

This happened sometime in the past few weeks. During the boom, the Walmart store in Williston was open 24/7. Walmart now opens at 6:00 a.m. every day, and closes at 1:00 a.m., except on Sundays, when it closes at 12:00 midnight, according to "Google Search." The website still shows the store being open 24 hours Monday through Saturday, and 12:00 noon to 12:00 midnight, but I believe the new hours are consistent with what "Google Search" is posting.

According to Google Search, Cashwise is open 24 hours, seven days a week.

Home of Economy opens every day at 7: 00 a.m.  (except Sunday, 12:00 noon) and closes at 6:00 p.m. every day.

Sportsman's Warehouse, Williston, North Dakota

The Links of North Dakota.

Love's, Williston, North Dakota.

Amtrak Station, Williston.

Update On The Proposed $4 Billion Petrochemical Plant For North Dakota -- October 1, 2015; Nameplate Capacity to Increase From 1.5 To 2 Million Tons/Year


March 3, 2016: update; very extensive update

February 6, 2016: I believe this case is PU-15-788 at the North Dakota Pubilc Utilities Commission site
Original Post

Oil & Gas Journal is reporting:
  • Badlands NGLs LLC, Denver, announced the "CLR deal" September 25, 2015
  • neither the value of the contract with CLR nor the volume of ethane committed were disclosed 
  • the duration of the supply contract was also not disclosed
  • however, Badlands did confirm that it has decided to expand the nameplate production capacity of the PE plant to a proposed 2 million tons/year (original plan: 1.53 million tons/year)
  • new capacity based on discussions with North Dakota and Western Canadian NGL-sourced ethane feedstock suppliers
  • licensing agreements with key technology partners were signed over the last several weeks
  • precise timeline for project's completion not disclosed
  • the plant was first announced in an October 13, 2014, press release
  • at that time, the company had agreements with two strategic partners for the plant
  • final site selection was to have been made by end of 2014 
  • Badlands has signed a mutually binding, MOU with Vinmar; the latter to take 100% of PE output produced by the proposed project for 15 years
  • as of October, 2014, the project required a capital investment of about $4 billion to complete
The poll remains open.

This is an artist's conception of the proposed plant, looking north from Dickinson: Williston would be to the north ("up" in the picture) and Watford City to the east (at the "right side" of the picture). There will be a row of trees planted around the site to help the facility blend in with the rest of North Dakota.

[In the far, upper right corner of the graphic, one can still see the "ball of dust."]

An Aside

To give one an idea of what a $4 billion petrochemical plant might entail, this is an interesting story over at PennEnergy and Shell's plans for an ethane cracker facility in western Pennsylvania:
Shell Chemicals announced Tuesday that it will pay $69 million to relocate a western Pennsylvania water source that's currently on the site of the company's proposed ethane cracker plant.
The company said it's funding nearly all of the $72 million project in Beaver County, and the Center Township Water Authority will pick up the rest of the tab. The project will replace existing drinking wells and create a new water intake site and treatment facility for the authority.
Shell could end up using the water facilities if it moves forward with a multibillion-dollar petrochemical plant at the former Horsehead Corp. site in Potter Township, but that amount would be less than 10 percent of the total water sold by the system.

Random Update On A Luff Exploration Red River Well In The Far Southwest Of North Dakota -- October 1, 2015

Back on May 31, 2014, this well was discussed. So, how did that well turn out?
  • 27946, 89, Luff Exploration, D and E Trust N-31H, Corey Butte, 640-acre spacing, 31-129-101, Corey Butte, a Red River well, t7/14; cum 41K 7/15; 
From the file report:
  • a grass-roots horizontal
  • target: the Ordovician Red River "B"
  • KOP: Silurian Interlake Formation
  • lateral: 5,005 feet; 97.7% in the target zone
  • thickness of target zone: four (4) feet
  • maximum formation gas: 13 units on initial entry; peaks of 800 with a maximum of 1,385 units were recorded (methane 1% = 10,000 parts per million)
  • spud: May 3, 2014
  • cease drilling: May 28, 2014

US Hits Debt Limit "Sooner Than Expected" -- Secretary Of The Treasury -- October 1, 2015

I think the US official debt has been frozen for several months now using "extraordinary measures" -- the euphemism used by the Secretary of the Treasury.

But today we learn that US debt will go over "debt limit sooner than we thought." Sooner than we thought? I think most folks thought we would have gone over our debt limit some months ago. It was fancy accounting that kept the debt limit "frozen" all these months, but finally the Secretary of the Treasury has run out of accounting tricks.

So, now we go through this political theater again for the next month or so while talking heads debate this non-issue. It's a non-issue because if things get really, really bad, the EU, led by Germany's Angela Merkel, will bail us out.

The debt limit will be raised slightly in late October/ early November to get us over the hump, and then a much greater debt limit to get us through another six months, perhaps through next June, getting us to the April 15th tax receipts. The holidays are always a problem for the government, so it's possible we get a smaller increase in the debt limit to get us into January, 2016, and then a bigger package then.

From Roll Call:
“Based on this new information, we now estimate that Treasury is likely to exhaust its extraordinary measures on or about Thursday, November 5,” Lew wrote in a letter to Boehner.
“At that point, we could be left to fund the government with only the cash we have on hand, which we currently forecast to be below $30 billion. This amount would be far short of net expenditures on certain days, which can be as high as $60 billion.”
Lew said the date could still fluctuate somewhat from Nov. 5, but the letter makes clear that the situation is more urgent than anticipated by lawmakers and staffers who expected to be able to bundle a debt limit increase with an early-December spending package.
“Without sufficient cash, it would be impossible for the United States of America to meet all of its obligations for the first time in our history,” Lew wrote.
Under this administration, I assume military retirees are at the top of the list not to get paid.

Gun-Free Zone


October 4, 2015: after being led to believe that law enforcement neutralized the shooter/killer, the sheriff now tells us that the shooter/killer took his own life when law enforcement "arrived." That's all it took to end this -- the arrival of some armed law enforcement personnel?

October 3, 2015: this is unprecedented -- any military striking "Doctors Without Borders" and killing almost two dozen staff members. Some are saying this is a war crime

October 3, 2015: some pundits took President Obama to task for his strong remarks condemning America for the mass execution and for his "lecturing" America again. It should be remembered, that this mass killing was carried out by a single individual (as far as we know) who probably had significant mental health issues (he was drummed out of the US Army in the first month of basic training).

I am wondering whether President Obama will use the same "pulpit" and the same language to condemn America for the mass execution of staff at an Afghanistan "Doctors Without Borders" clinic by one of his drones, a drone that he authorized to be used to attack sites in Afghanistan.

I'm not holding my breath.
Original Post
It's beyond me how we could have a mass shooting in a gun-free zone. After all, from the Los Angeles Times:
The campus employs at least one security officer, and several faculty members at Umpqua are retired law enforcement personnel, according to campus. But none of them are allowed to be armed, she said.
“We have a no-guns-on-campus policy,” Calvin said.
School policy bans guns on campus, including BB guns, water guns (squirt guns) and paint guns

The number of times this is being reported -- that this was a gun-free zone -- apparently is confusing to reporters and editors, also -- how could this happen in a gun-free zone?

Early reports suggest that many more were shot than were killed. Early reports suggest that Christians were targeted to die; non-Christians, shot in the knees.

Seven (7) New Permits -- October 1, 2015

Active rigs:

Active Rigs68191187186201

One well coming off the confidential list Friday:
  • 29238, 1,209, HRC, Borrud 156-101-2B-11-3H, Tyrone, 33 stages, 3.01 million lbs, t4/15; cum 32K 7/15;
Seven (7) new permits --
  • Operators: QEP (4), Newfield (2), Oasis
  • Fields: Grail (McKenzie), Bear Den (McKenzie), Missouri Ridge (Williams)
  • Comments:
Six (6) producing wells completed:
  • 24124, 1,248, Gadeco, Alexander 26-35-3H, Epping, t51/5; cum --
  • 26978, 840, Gadeco, Alexander 26-35 4H, Epping, t4/15; cum --
  • 28569, 648, Gadeco, Alexander 26-35 5TFH, Epping, t4/15; cum 3K 7/15;
  • 28570, 964, Gadeco, Alexander 26-356H, Epping, t5/15; cum --
  • 29732, 28, XTO, Eckert 41X-6C, Indian Hill, gas show as high as 1,804 units, t8/15; cum --
  • 29734, 208, XTO, Eckert 41X-6D, Indian Hill, gas shows as high as 7,924 units,

According to official U.S. trade data, the United States exported 21,000 barrels per day (b/d) of condensate derived wholly from natural gas (CDWFNG) to Brazil in July 2015.
Under the current U.S. export classification system, CDWFNG falls under the general heading of crude oil within the 2709 Schedule B category.
Consequently, these exports are counted as crude oil in the U.S. Energy Information Administration's (EIA) Petroleum Supply Monthly released yesterday. EIA made inquiries regarding the July shipment to Brazil and understands that the reported shipment actually consists of processed lease condensate. --- EIA

Serendipity, Coincidence, Or Thinking Outside The Box? Connecting Some Dots -- Reason #47 Why I Love To Blog -- October 1, 2015

A couple of days ago it was announced that Badlands NGLs was going to build a $4 billion petrochemical plant in North Dakota with feedstock (ethane) to be supplied by CLR.

Read that linked article and then read this Forbes article sent by a reader.

A couple of data points. First, Hess recently expanded its Tioga, ND, natural gas processing plant to produce ethane that it will send to a Canadian petrochemical plant. In that article (note the date of this article -- last year, 2014):
The expanded gas plant now produces ethane, a new product for North Dakota. The ethane is transported by pipeline to a plastics plant in Alberta, Canada.
The production of ethane is significant for North Dakota, with several companies looking at petrochemical manufacturing opportunities in the state, said Director of Mineral Resources Lynn Helms.
It really starts a whole new era for North Dakota,” said Helms, one of several state officials who attended the event. “With the growth in gas production in North Dakota, petrochemical manufacturing out of ethane is right on the doorstep.”
North Dakota Commerce Commissioner Alan Anderson said the possibilities are exciting for the state.
The question becomes, Why not have a plastic plant in North Dakota instead of shipping it all the way to Canada?” Anderson said. 
Now back to the Forbes article linked above:
In the meantime, producers in the region have suffered through a long, hot, and expensive summer. The NGL revenues which provided a nice boost to producer cash flows in earlier years have dwindled as increased production necessitates moving barrels farther away from the producing area for storage or export during the summer.  Figure 2 illustrates the pain level experienced by a producer who must remove some of the ethane in the gas stream to meet pipeline Btu requirements. Since there is currently no ethylene market in the Northeast, the Enterprise ATEX ethane pipeline to Mont Belvieu provides assured flow, but at a cost – for now.
Given this scenario, the prospect of exporting ethane later this year on Mariner East 1, to a different target market in Northwest Europe, makes moving additional barrels east to Marcus Hook more attractive. The new Mariner East 2 line will expand capacity to move other NGLs as well, adding more propane and butane to the volumes that can move to an East Coast port via pipeline in summer 2017. 
Bottom line: Some operators are planning to ship ethane all the way to Europe. 

The poll remains open: where you do think the proposed $4 billion petrochemical plant will be sited in North Dakota.

Now, switching gears. It is my impression that products coming from any petrochemical plant will be moved by rail. Who owns THE railroad in North Dakota? (Hint: his initials are "WB" and he lives in Omaha, Nebraska). Second question: who just bought a gazillion more rail cars? (Hint: his initials are "WB" and he lives in Omaha, Nebraska)?

Buried in this story is the answer, and I would have missed it except for the eagle eye of Don who caught it (and another reader caught a similar story in Bloomberg but that story did not say who bought the rail cars; the WSJ story does):
General Electric Co., which is actively selling GE Capital assets to focus more on core industrial activities, announced two deals for railroad services operations that have been part of GE Capital.
The conglomerate agreed to sell its tank car fleet assets and railcar repair facilities to Marmon Holdings Inc., with part of the deal closing on Wednesday and the rest slated for a fourth-quarter closing. Diversified industrial organization Marmon is part of Berkshire Hathaway Co.
We'll just tag this under "PCPBR" -- petrochemical products by rail.

Does The US Need 1,000 "Modern" Rigs -- Zeits Over At Seeking Alpha -- October 1, 2015

Does the US need 1,000 "modern" rigs? Richard Zeits over at Seeking Alpha. Mostly for investors. Me? I'm not particularly interested.

Seeing The Light

PennEnergy is reporting:
COLUMBUS, Ohio (AP) — Government requirements for the use of solar, wind and other forms of renewable energy by Ohio power companies would be suspended indefinitely under recommendations being prepared for release Wednesday by a legislative panel.
The Energy Mandates Study Committee's draft report was obtained by The Associated Press ahead of its release.
The panel is reviewing an Ohio law requiring utilities to generate 25 percent of electricity from alternative and advanced sources by 2025. It was created as part of a compromise brokered by Gov. John Kasich amid efforts to repeal the targets outright.
The report cites legal uncertainty and a need for "greater clarity" surrounding proposed federal clean coal rules among reasons that proceeding with Ohio's state-level mandates would be imprudent.
Ohio is among states that have sued over the Environmental Protection Agency's Clean Power Plan, which sets targets for carbon dioxide emissions for existing power plants as a means of reducing emissions from 2005 levels by 32 percent by 2030. Kasich has also written to President Barack Obama asking him to hold off on implementing the plan until questions are resolved by the courts.
For The Granddaughters

Back in 1996, my parents gave me a copy of Stephen E. Ambrose's D-Day June 6, 1944: The Climactic Battle of World War II, c. 1994, obviously published for the 50th anniversary.

For some reason I never got around to reading it until now. Having been stationed in Europe for over ten years and having visited Normandy several times and having read so much about "it," I guess I never was interested in reading about the subject again.

What a pleasant surprise. After reading the first three chapters, I'm hooked. This is another great Stephen Ambrose history. I always find it amazing how he can take a subject on which thousands of books have been written and make it all seem "fresh" again. An excerpt from the book, early on, p. 45.

Something tells me there will be "stories" in this book that will relate to what's going on in the Mideast today.

More importantly, it will dovetail very, very nicely with Foyle's War which we are watching on DVD. We are into Set 3 of 8. I assume they are streaming set 9 now. From wiki:
Foyle's War is a British detective drama television series set during and shortly after the Second World War, created by screenwriter and author Anthony Horowitz and commissioned by ITV after the long-running series Inspector Morse came to an end in 2000. It has been broadcast on ITV since 2002. Simon Shaps, then ITV's director of programmes, cancelled Foyle's War in 2007, but numerous complaints and positive public demand prompted the next ITV director, Peter Fincham, to revive the programme after successful ratings in series five, which was broadcast in 2008.

On 12 January 2015, ITV announced that no more episodes will be commissioned due to the high costs of production and its intention to broadcast original drama commissions. The last episode was broadcast on 18 January 2015.

War? -- October 1, 2015


October 1, 2015: I was wrong. The reason oil was up was because of predictions that Hurricane Joaquin might hit the Gulf. Those early predictions were wrong, and oil has come back down a bit.
Original Post
The movers and shakers on Wall Street seem to think war has broken out in the Mideast. The Dow is down about a 100 points (after being up in pre-market / futures) and oil is up over 4%.

Or maybe they are just reading Drudge headlines:
  • Russia airstrikes in Syria continue
  • Putin drafts 150,000
  • USA disarray
  • Iran troops ready
  • President's weekend golf schedule released
Okay, I made up that lat one.

If one looks at the timeline, it seems the transition from "no US strategy for fighting ISIS" and the "invasion by Putin" occurred at a time when SecState took his eyes off the ball, as they say here in the Midwest, and started talking about climate change. Again. I guess we need a Syrian Czar.

Any Information Which Companies Might Be Fracking This Winter? -- October 1, 2015; Dems Walking Back ObamaCare -- Fiscal Times

A reader asked if anyone knew which companies would be fracking through the winter? I certainly don't know. If anyone has any information, feel free to commend (anonymously, is fine) and/or by e-mail (my e-mail is at the blog.

Speaking of Fracking

A reader writes:
Just thought I would let you know Abraxas will be fracking three wells this upcoming week, most likely Tuesday or Wednesday. They are pulling all adjacent wells right now for frack protection. All three had failed liner hangers that prohibited the completion earlier last month.
The reader did not provide any more details. But possibly,
  • 29779, SI/NC, Abraxas, Sten-Rav 1H, North Fork,
  • 29780, SI/NC, Abraxas, Ravin 8H, North Fork,
  • 29990, SI/NC, Abraxas, Stenehjem 5H, North Fork,

Fiscal Times is reporting:
After five years, two midterm disasters, and a rollout that reminded Americans why they fell out of love with big government in the 1970s, reality has finally begun to dawn on some Democrats about Obamacare. With open enrollment about to start and a third straight round of premium spikes about to hit voters’ pockets, the Democrats’ leading presidential candidate has offered a “major break” with the Obama administration on its signature domestic policy achievement.
Hillary Clinton will speak out against the so-called Cadillac tax on high-coverage health care plans, as early as this week, according to The New York Times. The politics on this are complicated, and not entirely focused on health care; in fact, this has more to do with the health of Clinton’s struggling and scandal-plagued campaign. Even so, the Cadillac tax on high-coverage plans is a key to Obamacare, both fiscally and philosophically, and Clinton’s coming attack on it shows just how much of an albatross the entire system has become for her party.
The nature of this strategic decision becomes plain from Maggie Haberman’s report. Clinton reached out to Randi Weingarten to inform her of this decision. Weingarten is president of the American Federation of Teachers and an important player in the labor movement. Unions have long opposed the Cadillac tax, having spent decades demanding top-notch coverage for their members. The tax applies a 40 percent fee on benefits above a certain level, potentially costing labor unions hundreds of millions of dollars that they would rather spend elsewhere – say, on Democratic presidential and Congressional campaigns.
Why make this particular sop to Big Labor now? Clinton recently announced her opposition to the Keystone XL Pipeline, a project backed by unions in anticipation of the skilled labor required to build it. Clinton needed to take that position to defend her left flank from Bernie Sanders, whose opposition to Keystone has been consistent and vocal. That forced Clinton to placate labor leaders by pushing back on Obamacare, which until now Democrats have defended in its entirety – even from unions.
Union opposition arose during the drafting of the Affordable Care Act, with unions demanding either the removal of the Cadillac tax or an exemption from it, but the Obama administration and the Democratic Congress resisted. In part, the decision to oppose the unions came from the desperate political need to produce a Congressional Budget Office review that would show Obamacare as deficit-neutral in its first decade. Under the static tax analysis of Democrats, the Cadillac tax was expected to raise $32 billion in that first decade.
This is a huge trainwreck. Not only are they going to keep (and probably expand) the benefits, the Dems are cutting the ways to finance ObamaCare. Watch for demands for the middle class to pony up for money to support ObamaCare.

Thursday Data -- October 1, 2015

Natural gas fill rate (dynamic link): 98.  In the East Region, stocks were 25 Bcf below the 5-year average following net injections of 62 Bcf.

Gasoline demand (dynamic link): still decreasing as we go into the autumn months; around 500,000 bopd higher than one year ago.

The July crude oil import data has just been released:
  • Saudi Arabia: 1.172 million bopd for the month of July, 2015, vs 1.231 million bopd one year ago
  • For the past decade, the range has been 1.499 million bopd - 1.026 million bopd
All countries: 9.51 million bopd, July, 2015
  • OPEC: 2.896 million bopd, July 2015
  • Kuwait took a huge drop, from 313,700 bopd to 143,741 bopd
  • Nigeria, on the other hand, month-over-month, a huge jump: 20,900 bopd to 130,064 bopd 
  • Venezuela remained fairly flat
  • Mexico is about the same as Venezuela
  • Canada is major source of US imported crude oil at 3.52 million bopd 
I assume much of the US imported oil is heavy oil required by our Gulf Coast refineries. I assume most of Saudi imported oil goes to the refineries it owns along the Gulf Coast. I seem to recall US Saudi refineries require about a million bopd.

 Job Watch

Wow, first time unemployment claims surge 10,000, and this is the Bloomberg headline: US Jobless Claims Are Near Decade Lows. Six or seven years into the recovery and a gazillion dollars in stimulus, I would hope that jobless claims were at decade lows.

And yet applications surge 10,000 today. It is clear that these boilerplate articles are written ahead of time, and the numbers filled in when the data is released.

From the linked article, it turns out that not only did first time claims surge, they increased significantly more than expected:
Jobless claims climbed by 10,000 to 277,000 in the week ended Sept. 26. The median forecast of 48 economists surveyed by Bloomberg called for 271,000.
The four-week moving average fell to the lowest level in almost two months and the total number of people receiving benefits was the smallest in 15 years.
I'm somewhat surprised this was not the lede:
The four-week moving average, a less volatile measure than the weekly claims numbers, decreased to 270,750 last week, the lowest since early August, from 271,750.
Let's see, early August -- what was that? Six weeks ago? Whatever.

Ford's September Auto Sales

Six minutes after the market opens, the first day after the end of the month, auto companies release their sales data. Meanwhile, the EIA lags about two months with crude oil import data.


Ford's September sales:
  • sales increased 23% month-over-month; up 23% year-over-year
  • F-Series pick-up trucks up 28%
  • total truck sales at highest level in nine years
  • commercial vans post best September since 1987 -- up 86%
  • SUV sales up 27%; best September since 2003
  • Mustang sales up an astounding 199% -- best performance since 2007
All gas guzzlers.  

US Auto Sales, September, 2015

CNBC is reporting: 
  • best is more than a decade
  • 18.17 million total sales; best run rate since July, 2005
  • [note: entire Labor Day weekend fell in September for the first time since 2012]
  • GM: sales rose 12%, to 251,310 vehicles
  • Ford: sales rose 23%, to 221,599 vehicles
  • Fiat Chrysler: sales increased 14% to 193,019 vehicles; Jeep jumped 40%
  • VW: US sales rose 0.6% versus an expected decline of 7.3% in September

RBN Commentary On Refinery Adjustments -- Thursday, October 1, 2015

Active rigs:

Active Rigs68191187186201

RBN Energy: could refinery adjustments to handle more light crude be a bust? This is another very important article for those trying to get a better understanding of the US shale revolution. This is a keeper. The article will be archived at the source.
The deluge of light (and super light) sweet crude from U.S. tight-oil plays like the Permian Basin, Bakken and Eagle Ford has had many effects, including a push by refiners to rework facilities designed for heavy-crude processing to handle an excess of lighter oils. Many of these projects are underway and expected online in the next two years. Today, we consider refinery infrastructure investments that might not pan out in a low crude price world.
Everyone--even those whose interest in the oil industry extends only to how much they pay for gasoline or heating oil—knows that U.S. oil production has risen significantly over the past few years (from 5.6 MMb/d in 2011 to 8.7 MMb/d in 2014, and 9.3 MMb/d as of June 2015). You need to be something of a petro-geek, though, to know that almost all of the increase in domestic production the past few years has come in the form of lighter, sweeter crudes, especially very light oil with American Petroleum Institute (API) gravity of between 40 and 50 degrees. (Crudes with API gravity between 32 and 40 degrees are typically categorized as light, while heavy crudes--say, diluted bitumen from the Alberta oil sands--have gravities below 22 degrees, and medium oils have API gravity of between 22 and 31 degrees.) Refineries are designed and built to operate most efficiently when processing a certain type or mix of crudes, and a lot of refinery upgrades in the years leading up to the Shale Revolution were intended to accommodate a world where lighter crudes were thought to be running out, to be replaced by heavier (lower API gravity) crudes – particularly on the Gulf Coast. There is still plenty of heavy crude out there that comes to the Gulf Coast – from Mexico and Venezuela for example and also Western Canada. But with the U.S. producing a surfeit of light crude and with prices for that light crude being discounted – refiners began to consider investing in functionality to improve their light crude processing capacity.
Production in “light tight” oil plays like the Permian, Bakken and—most pertinent to today’s blog—Eagle Ford (which produces the lightest crude of them all) has grown exponentially since 2011 and is expected to remain high even under a pessimistic oil-price scenario according to the Energy Information Administration.