Saturday, March 26, 2016

The Tea Leaves Suggest This "Train To Nowhere" Project Is Dead; If Allowed To Continue, This "Train Wreck" Will Break The Bank -- March 26, 2016


March 28, 2016: the original post was hardly dry when this story from The Los Angeles Times broke as the headline story: changes could add hundreds of millions of dollars to first 29 miles of bullet train. This project, if allowed to continue, is simply going to break the bank.

That's just the "cost overrun" today: hundreds of millions of dollars for the first, and the easiest, 29 miles of this debacle. The story:
The California rail authority is facing hundreds of millions of dollars in potential change orders and other prospective cost increases on the first 29 miles of the bullet train system, state and private contractor documents show.
The change orders and other claims are coming from construction firms, utilities and railroads involved in that first segment, according to the documents.
Several of the biggest claims and change orders could cost 10% to more than 30% above original estimates for the segment, which is to run between Madera and Fresno. Scores of smaller claims could mean additional spending.
Higher costs for the first construction phase of the project would carry implications for the entire $64-billion system.
The rail authority has repeatedly asserted that Central Valley contracts were signed for below budget amounts. If claims submitted after those contracts were signed send costs above budget, they will call into question the rail authority's cost projections for the full system.
The contractor team on the first segment has sent the rail authority a log that includes more than 300 pending change orders and notices, about 200 of which do not yet include cost estimates. The team, led by Sylmar-based Tutor Perini, won a $1-billion contract in 2013 for the first segment. The Times obtained a copy of the log dated last November and a subsequent update in January.
Original Post
From The Los Angeles Times today:
The California rail authority’s failure to identify a source of funding to connect Los Angeles to the future bullet train system is not acceptable, said Hasan Ikhrata, executive director of the Southern California Assn. of Governments.
Until the high-speed rail authority released a new draft business plan last month, the state had planned to open its first operating segment between Burbank and the Central Valley by 2022. But in a major concession to its limited funding, the plan now calls for a cheaper segment that would run from San Jose to the Central Valley by 2025.
By the time that initial segment is built, all the existing funds would be exhausted, leaving uncertainty about how and when the line would cross the geologically complex mountains of Southern California.
The state’s Legislative Analyst’s Office has raised the same concerns, saying in a report that the business plan fails to make a case for how it will pay for a completed system. The bullet train has been funded so far by a $9-billion bond, $3.2 billion in federal grants and about $500 million a year in greenhouse gas fees, all of which leave big shortfalls in the $64-billion megaproject. The shortfall is estimated at $43.5 billion, an amount that would be difficult or impossible to find in the short term.
The Assn. of Governments has played a key role in representing the region at the rail authority, signing a 2013 memorandum of understanding that provided for about $1 billion of investments in Southern California’s transit systems to prepare for the future bullet train. The deal put Southern California on a near equal footing with the Bay Area, which received money to electrify its Caltrain commuter system.
Geico Rock Award 2016: Nominee

A screenshot taken from The Drudge Report, March 27, 2016:

It doesn't quite meet the criteria for the Geico Rock Award, but comes very, very close. 

A Note to the Granddaughters

Now that I have completed Doctor Zhivago and put it aside for a few days or weeks, I will try to tackle JRR Tolkien's translation of Beowulf (again). For whatever reason, Beowulf has always fascinated me as a literary mystery but I've never warmed to the story or the any of the translations.

It will be interesting how far I get this time.

First Time Ever -- Augustana Vikings, Sioux Falls, SD, My Undergraduate Alma Mater -- NCAA Division II, Men's Basketball -- National Champs -- March 26, 2016

EOG Well Records 500,000 Bbls In Less Than Three Years; So Much For Marching Against Fear -- March 26, 2016

EOG well goes over 500,000 bbls crude oil cumulative:
It looks like this well was taken off-line in July, 2015, to change production method from flowing to pump with the installation of an ESP on July 31, 2015.
  • 24667, 1,179, EOG, Van Hook 19-2523H, Parshall, t7/13, cum 520K 7/16; only one day production in July, 2015; since then, full up; 50 stages, 10 million lbs;

Breaking news: Organizers cancel Sunday's Brussels attacks 'March Against Fear'. ISIS takes notice.

Breaking news:  Russia says its warplanes have made 40 sorties around the ancient Syrian city of Palmyra in past 24 hours, with 158 Islamic State targets hit, more than 100 militants killed. ISIS takes notice.

Is the US even involved any more? President Obama made the decision to "sit this one out." That was reported in the cover story of this month's issue of The Atlantic: "The Obama Doctrine: How he has shaped the world." From that story, these two sidebars highlighted his un-Trumanesque doctrine:
  • The moment Obama decided not to enforce the red line and bomb Syria, he broke with what he calls, derisively, "the Washington playbook." This was his liberation day.
  • Leon Panetta, one of several SecDefs for President Obama, has criticized the president's failure to enforce the Syrian red line.
And he has the audacity to say the Senate is not doing its duty to act on his Supreme Court nominee, when he himself has apparently decided to throw away "the Washington playbook" and do it his way: sit this one out.

Talk About Poor Timing

This week's issue of The New York Review of Books arrived in mailbox a couple of days ago, about the very same day, if not the exact day, March 22, 2016, when "Zaventem and Maelbeek bombs kill many" as reported by the BBC.

Ian Buruma has a piece, "In The Capital of Europe," in this week's issue of The New York Review of Books, pp. 36 - 39. It begins:
Brussels has frequently had a bad press. Already int he 1860s, Baudelaire, who fled there from the French censor, called the Belgian capital "a ghost town, a mummy of a town, it smells of death, the Middle Ages, and tombs." To a growing number of Europeans, "Brussels" is a byword for bureaucratic bullying by the so-called Eurocrats.

Donald Trump called Brussels a "hellhole." Perhaps he was thinking, if that is the right word, of Molenbeek. Densely populated by immigrants, mostly from North Africa, this district has become a symbol of seething european jihadism. Last year's mass murders in Paris were apparently plotted there; the number of young men and women (around a hundred) who have left Molenbeek to fight for ISIS in Syria and Iraq is relatively high.

Still, much of the negative reputation of Brussels is undeserved and overblown. [Not according to recent reports from The New York Times.] Brussels is not a dangerous city -- not even Molenbeek, which is shabby, sullen (unemployment 30 percent), socially cut off [or as Donald Trump would say, a "hellhole"], but not specifically menacing. [I guess if you don't count recent events.]
Talk about bad timing for this article to be published. No wonder journalists often turn to alcohol.

  • Molenbeek: In 2015 and 2016, the municipality gained notoriety as the base of numerous Islamic terrorists, carrying out both attacks in France and Belgium. Molenbeek is about an hour and a half northeast of Brussels.
  • Maelbeek, a suburb of Brussels; wiki does not mention the Islamic connection. Wiki will have to update its Maelbeek page after the airport and subway station bombing last week.
The Katie Ledecky Page

Nineteen reasons Katie Ledecky is cooler than most 19-year-olds:
  • she made her first Olympic team at her first senior national meet
  • she won an Olympic gold medal at age 15
  • she was the youngest US athlete at the London 2012 Olympics
  • she has won 15 gold medals in major international competitions
  • she has broken 11 world records
  • she won three Golden Goggle awards for Female Athlete of the year
  • she earned the FINA Swimmer of the Year Award in 2013
  • she was named the USOC's 2013 Olympic SportsWoman of the Year
  • she swims in every freestyle distance from 200 to 1,500 meters
  • she is the first to win all of those races at a major meet
  • she won four Golden Goggle awards for Female Race of the Year
  • she swims 8,000 meters a day in training
  • she set a world record in the 1,500-meter freestyle in prelims
  • she has never won an international medal that isn't gold
  • she got Michael Phelps' autograph when she was 9 years old
  • she deferred enrollment at Stanford to train for the 2016 Olympics
  • she swims faster than nine-time Olympic gold medalist Mark Spitz
  • she was named to the Athletes' Advisory Commission for LA 2024
  • she has the top eight women's 800-meter freestyle times in history

Week 12: March 20, 2016 -- March 26, 2016

The top energy story this week may be the contribution by Richard Zeits over at Seeking Alpha: the Permian Basin is fetching premium prices.

The international top energy story of the week may very well turn out to be the results of the discovery well near Gatwick Airport, England. A bigger story, of course, was that Shell and Saudi Aramco have split, making it possible for Saudi to monetize its assets and become a huge US midstream and downstream player. But that story broke the previous week.

Playing devil's advocate, as they say, I might argue that the biggest, biggest, biggest story was the news that Whiting, CLR, EOG, or Hess did not buy Emerald Oil's assets on the cheap. Really, really cheap. See below. I think a lot of folks might have missed that one. Five years from now we're going to see some new names in the Bakken break into the top ten Bakken producers. 

Bakken update, Mike Filloon 
Marathon to sell Wyoming assets; focus on Texas, North Dakota
Emerald Oil files for bankruptcy protection; mineral acres sold fro $150/acre in core Bakken?
The list of OXY USA wells transferred to Lime Rock Resources has been released
Top-tier plays in US tight oil -- Bakken 800K BOE EUR #2
CLR in the STACK/SCOOP -- a Mike Filloon update

Analysts looking at impact of completing DUCs (they're getting ahead of their headlights)

Bakken CBR to the Pacific Northwest -- RBN Energy update
Palermo CBR terminal now on-line

Another example of a possible halo effect when fracking
Can the halo effect stretch across an entire section? Part I 
Can the halo effect stretch across an entire section? Part II

Natural gas processing
Bear Creek NGL processing plant to be on-line 3Q16; near Killdeer, North Dakota

The Bakken from space

Second greenfield refinery moves forward -- Belfield, North Dakota

Two North Dakota pipeline projects move forward

Bakken economy
$11 million school expansion approved for South Heart, North Dakota
Williston Wire updates
Williston names fastest growing micropolitan city fifth year in a row ; also here
Construction to begin on $2.3 million Pembina-Walsh Livestock Processing Plant

John Kemp looking for US gasoline demand record to be broken this summer
US shale gas -- ethane: first American shipment to Europe
The Saudi Surge: the crude oil market will re-balance this year -- Rystad
Is contango the new normal? 
Book review: Accidental Superpower
WTI-Brent narrows
How the Brent calendar expiration change influences the WTI-Brent spread
The Brent/WTI crude futures relationship just got trickier 
US distillates exported to northwest Europe from US gulf coast have surged this month (March)

Bakken Update: Mike Filloon -- March 26, 2016

Summary over at SeekingAlpha:
  • Expectations are for oil prices to trend lower in the coming weeks as the recent gains were probably a relief rally
  • The dollar should continue to weigh on oil prices through year end as the US economy significantly outperforms markets abroad
  • Although we have seen improvements in contango and current prices, the 3.1 billion barrel glut will weigh on the market for some time
  • Fears remain that this glut is much like that of the 1980s, but the market is much tighter and OPEC doesnt have the spare capacity
  • Cap ex reductions are over done and the price of oil could improve significantly in 2017
The question is not whether "contango is the new normal," but just how severe could the rebound be in 2017?

A Note to the Granddaughters

Granddaughter #3 is watching granddaughter #2 play soccer. Granddaughter #1 is on a road trip with her dad to Corpus Christi for the weekend for a business trip / father-daughter weekend.

Sophia, not-quite-21 months old.

The Apple Page

The SkyView app. At the App Store, for $1.99.

A couple of days ago I mentioned that I wished Tim Cook would take Apple private, limiting ownership of the company to Apple employees, current and past. Apple is known for its attention to detail and it drives some investors nuts, spending extra money on stuff they don't think is necessary.

For example:
One of the Apple Watch's quirkier features is its "Motion" watch face, which sets the time against a backdrop of fluttering butterflies, floating jellyfish, and blooming flowers.
Not everyone will like them, but Apple thought that some people really would. So, as Wired's David Pierce recounts, the Watch design team went to some pretty extreme measures.
"We shot all this stuff," human interface lead Alan Dye tells Wired. "The butterflies and the jellyfish and the flowers for the motion face, it's all in-camera." The flowers were photographed in stop-motion, which can be a painstaking process — Dye says one flower required more than 24,000 shots over 285 hours.
For the jellyfish, meanwhile, Apple built a tank inside its design studio and used a Phantom slow-motion camera to shoot 4K 300-fps footage, even though it would be displayed on a tiny 312 x 390-resolution watch.
While the Apple Watch is far from a perfect product at launch, it's clear that Apple expended a huge amount of effort in areas of its development. "No reasonable person can see that level of detail," says Dye. "And yet to us it's really important to get those details right."
285 hours x $50/hour for a photographer? Nope -- I'm sure it was all done by automation once things were set up. But it probably still cost a lot more than some investors would like to see.

Still Drying Out

I mentioned the other day that I got caught in a Texas downpour -- completely soaked by the time I got home. I've been drying out my tennis shoes in the dryer for the past three days -- I guess this is the third day -- they are almost dry, but I am beginning to think they are not salvageable.

The good news: I never liked those tennis shoes to begin with.

The tennis shoes I prefer have been worn for years. They no longer have any "leather" sole but in all other respects they are all soul and I can't get rid of them. It is amazing. When I wear them, I can feel the street against my feet. There are no holes in the bottom of the shoes, but the sole is so incredibly thin. They are no longer any good for walking or running, but wow! what perfect bicycle shoes. Funny how things work out.

What irritates me most is I bought a pair of goggles two summers ago for bike-riding (some nights the bugs are pretty bad, and when going through areas of mowing or construction, it would be nice to have goggles. And now I can't find those incredibly unique "Minion" goggles.

Just "Use" Whatever Works
And "They" Call Trump A Buffoon

    Fathomless Ignorance
    The good news: we are now less than 300 days until President Obama gives his last military salute as POTUS.

    The bad news: It looks like the "JV Team" may have just moved into Division 1, among the other varsity teams.

    The New York Times is reporting that the JV Team may have what it needs to put the Belgian nuclear industry in play.  And if The New York Times reports it, it must be true.
    As a dragnet aimed at Islamic State operatives spiraled across Brussels and into at least five European countries on Friday, the authorities were also focusing on a narrower but increasingly alarming threat: the vulnerability of Belgium’s nuclear installations.
    The investigation into this week’s deadly attacks in Brussels has prompted worries that the Islamic State is seeking to attack, infiltrate or sabotage nuclear installations or obtain nuclear or radioactive material. This is especially worrying in a country with a history of security lapses at its nuclear facilities, a weak intelligence apparatus and a deeply rooted terrorist network.
    On Friday, the authorities stripped security badges from several workers at one of two plants where all nonessential employees had been sent home hours after the attacks at the Brussels airport and one of the city’s busiest subway stations three days earlier. Video footage of a top official at another Belgian nuclear facility was discovered last year in the apartment of a suspected militant linked to the extremists who unleashed the horror in Paris in November.
    The EU has no "excess" energy. The continent is on the cusp -- they've been shuttering so many nuclear plants in Europe, returning to coal and emphasizing inefficient solutions like wind and solar: if any more nuclear plants are taken off-line unexpectedly, due to terrorist concerns, look for this story to be reported again: US distillates exported to northwest Europe from US gulf coast have surged this month (March). That was a "cut and paste" from this week's to stories. It isn't even summer yet, but winter in Europe comes soon enough.

    Maybe Not

    I thought I had posted the fact that Belgium does not allow raids on terrorists during the night, but I couldn't find the post, so maybe I had not. But for those who missed it, The New York Times reports it:
    The authorities in Belgium said on Wednesday that one of the Paris attackers may have been holed up in a house in Brussels two nights after 130 people were killed and hundreds more injured — but that he could have escaped because of a law banning police raids on private homes from 9 p.m. to 5 a.m., according to the country’s justice minister.
    The revelation by the justice minister, Koen Geens, that the suspect, France’s most wanted man — Salah Abdeslam — might have gotten away because of an arcane law intended to safeguard family privacy only adds to the picture of a severely dysfunctional and ineffective government in Belgium.
    Even The Times uses "arcane," "severely," "dysfunctional," and "ineffective" when describing Belgium.

    POTUS? The Times gives him a pass. 

    Hillary and The Times? Don't even go there.