Friday, May 27, 2016

Here We Go ... Dakota Access Pipeline Keystoned In Iowa -- May 27, 2016

Dakota Access Pipeline --- construction permit "yanked" -- in Iowa .... Keystoned ... as predicted.

New High School -- Staff, Teachers Starting To Move From Old High School To New High School -- Williston, North Dakota; Williston Probably Grew Almost 10% In 2015 -- The Year Of The Bakken Bust

As the subject line says. Last day of school was May 25, 2016, for this school year. Students, staff came back May 26, 2016, to help start the move.

Graduation will be held May 29, 2016.

Will the new high school be big enough? The U.S. Census Bureau recently released 2015 city population estimates. The growth rates for North Dakota's ten largest cities ranged from +9.8 percent for Williston to -0.4 percent for Jamestown. The five North Dakota cities with the largest number of new residents:
  • Watford City (+2,505)
  • Fargo (+2,419)
  • Williston (+2,416)
  • Bismarck (+2,210)
  • West Fargo (+1,846)
As a percentage, no doubt Watford City also held the top spot. Then probably Williston. Link to US Census Bureau here.

Housing? North Dakota had the fastest rate of growth among the 57 states. The US Census Bureau has released its 2015 estimates of the number of housing units for the nation, states and counties.
These estimates show that Texas gained more housing units than any other state between July 1, 2014 and July 1, 2015 (adding 162,000), with North Dakota experiencing the fastest rate of growth in the number of units (3.5 percent).
Among counties with at least 2,000 housing units, McKenzie, ND, added units at the fastest rate over the period, as the number rose 55.9 percent (from 3,760 to 5,862).
For newbies: see Watford City above? Watford City is the "major" city in McKenzie County. For Williams County to the north, it is Williston.

The Dickinson Press reports birth rates are steady in western North Dakota. I've mentioned before that the most important metric to track the Bakken economy is the public school census in Williston and in Watford City in the autumn of 2016, three to four months from now.

After decades of dreaming, the Stark County Fairgrounds is now about a summer away from reality. With the earthwork just about completed and much of the red tape squared away, Stark County Fair Board President Lee Ann Karsky said construction of the fairgrounds and rodeo arena south of Dickinson will begin in full sometime next week with a completion target of September.

This has always amazed me. This is almost as big as North Dakota's annual paddlefish season and deer hunting season. Williston often hosts the nation's Babe Ruth World Series:
Baseball fans are invited to get their advance tickets for the 2016 Babe Ruth World Series at Cherry Creek Radio's 66 cent breakfast on Wednesday, June 1 from 7-9 a.m. at the Grand Williston Hotel and Conference Center.
The World Series will be held August 13-20 at Ardean Aafedt Stadium in Williston.
World Series family passes run $50 each while individual passes run $25 each. The eight-day tournament will feature 25 games of exciting baseball action.  
Job Watch

Spinmeisters already preparing us for "crummy" jobs report next week. If the report is "crummy," blame it on this "one-time event": the Verizon strike.

As if we've never had strikes in the US before. Whatever.

Managers Fired, Lines Move

Two weeks ago, airport security lines stretched for 3 hours or longer. TSA blamed it on short staffing and too many passengers.

This week, more passengers than last week due to the Memorial Day weekend, and folks are "flying" through security.
Travelers who were dreading long airport security lines Friday ahead of the Memorial Day weekend instead reported moving quickly through checkpoints after authorities opened extra screening lanes and used bomb-sniffing dogs to give some passengers a break from removing their shoes.
"Wow. I mean, wow," said Mike Saresky, who flew into Chicago from Philadelphia, where he breezed through airport security in 12 minutes and got to leave his shoes on. "I thought it was going to be a lot worse."
New managers.

TSA said they needed more personnel. I can guarantee you TSA did not advertise for, perform background checks, hire, train, and schedule new workers in less than two weeks. The whole debacle was staged from the beginning.

Fliers and airlines called TSA's bluff.

DUCs -- Update -- Graphic -- May 27, 2016; Gasoline Demand Updated


June 12, 2016: Bloomberg has an update on DUCs, but I don't think the article adds much to the discussion ... yet. There is a graph, where are the DUCs?
  • Permian Basin: about 1,200
  • Eagle Ford: about 900
  • Bakken: about 800
  • Niobrara: about 600
  • Rest of US shale: about 200 in all
It would be nice to see some denominators with these numbers. I haven't seen much movement in completing DUCs yet.

May 28, 2016: see first comment --
The cost to drill and frac a well in the Niobrara now ranges from $2.1 to $2.5 million.
They are implementing a process termed 'monobore' which, if circumstances allow, should spread to the shallower Permian formations and elsewhere.
The output from Niobrara wells is substantially lower than the Bakken's costs, but - at two and half million a pop - quite a low cost operation. 
Original Post
An Oil & Gas Journal DUC graphic. Five North Dakota counties are represented, from top to bottom (most to least): McKenzie, Mountrail, Dunn, Williams, and Divide.

The graphic is a bit confusing. I thought it was the number of DUCs, but the heading suggests it is the cost of well completion (CWC) per bbl of oil by county. I could be wrong. This will take you to the linked story.

From that link, explaining the graph above:
The heart of the Denver-Julesburg (DJ) basin exhibits the most commercial drilled but uncompleted (DUC) backlog, said a Rystad Energy study that estimated the DUC inventory in Weld County, Colo., was economic to complete at an average light, sweet crude oil futures price of $30/bbl.
Other counties that exhibit favorable economics are Reeves County, Tex., in the Permian basin’s Delaware and McKenzie County, ND, in the Bakken formation, said Artem Abramov, Rystad senior analyst in Oslo. He believes much of the US shale DUC inventory is commercial given current oil prices.
“Significant support to the US Lower 48 oil supply can be expected in the near months as market sentiment gradually moves in a positive direction,” Abramov told OGJ.
Weld County topped Rystad’s DUC ranking list by inventory size with almost 600 oil wells awaiting completion crews.
Gasoline Demand

Favorite Production Graphic Has Been Updated -- May 27, 2016

My favorite global production graphic has been updated. The new graphic:

Note the incredible increase in crude oil production by Russia (purple arrow) and Saudi Arabia (green arrow) since 2012. The remarkable increase in Saudi Arabia production between October, 2014, and October, 2015, resulted in the price of oil plummeting from $120/bbl to $25/bbl with talk at one time suggesting oil would go to $18/bbl (Goldman Sachs), or thereabouts. Exact quotes will be hard to find as folks try to walk back their "crazy talk."

Platts has projections for Russian production through 2017 at this link

May 27, 2016

Wow, Wow, Wow! 1Q16 GDP Raised To 0.8% -- Mary 27, 2016; The Saudi Aramco IPO -- Not In Any Hurry -- Inshallah

After weeks of massaging the data, the government was able to revise the 1Q16 GDP estimate ... upward ... drum roll ... 0.8%. The market's reaction? Dow futures are up ... 12 points. Green, but for all intents and purposes ... flat. But at least it's green. I can't wait to hear how Ms Yellen spins this story. I won't be listening to CNBC's spin on the spin.

A Date Etched In The Sand

I'm sure this was "known" by everyone "in the know" but somehow I missed it.

Quick: when is the Saudi Aramco IPO going to be launched?


No one knows. Not even the company's chief executive Amin Nasser who said the Saudis are "working very seriously on the IPO." Which is very good news. To hear that they are working "very seriously" on the IPO.

It looks like Saudi Aramco will hit its stride about the time MuskMelon delivers his 500,000th Model 3 Tesla. This is the time frame:
The company is finalising its proposals and will present them to its Supreme Council soon, which could see part of Aramco publicly listed by 2017-18. However, Nasser said the timeframe was not set yet.
Wow, the operative phrase in that note: "could see." Inshallah.

Parse that statement closely:
  • could see an IPO
  • could see the listing by 2017 - 2018
Could see the IPO? Does this mean that it's possible there won't even be an IPO? Once the Supreme Council sees how much information the EU and the SEC want, my hunch is the Supreme Council is going to get very, very cold feet (no matter how hot the sand is). For a paltry $10 billion in cash, the Saudis are going to have to divulge tons of information on their operations that they've held secret for decades.

It was always the implication that Saudi needed the cash now and needed it quickly, but if they are putting this off to 2018, and if oil goes back to $100/bbl or even higher, they are not going to need this additional cash. They can implement Vision 2030 without raising cash on the open market.
As part of Aramco's market share push, the company plans to raise its total refining capacity - both inside the kingdom and abroad - to 8 million-10 million barrels per day from around 5.4 million bpd now.
This week it signed an agreement to supply up to 270,000 bpd of crude oil to a refinery it will jointly upgrade with Indonesia's Pertamina.
Forecasting growing crude oil demand, Aramco has said it was seeking to invest further downstream as part of broader expansion plans in several markets such as China, India, Vietnam and the United States.
The Salman Plan is linked at the sidebar at the right.

Update: Bloomberg has a long, long article on Saudi financing US debt through Treasury bonds going back to Richard M. Nixon. This is one more reason why I think Saudi's Supreme Council will be hesitant to go through with the IPO: the kingdom is going to have to divulge a lot of information in exchange for a few billion dollars. 

Extreme Unicycling

Appareo -- May 27, 2016

Anyone interested in North Dakota success stories, or the North Dakota aircraft industry or avionics, needs to visit the Appareo site and spend some time going through the various posts. It is another incredible story coming out of North Dakota.

For newbies: it looks, this company is headquartered on the eastern side of the state; the Bakken is on the western side.

It is interesting to note where Appareo has offices. The company is headquartered in Fargo, North Dakota, with offices in Tempe, Arizona and Paris, France. There is only one reason to be in Paris: Airbus. Okay, the food. And the wine. And the Louvre. Okay, there are a gazillion reasons to be in Paris, but when I saw an avionics industry with offices in Paris, I immediately made the Airbus connection.

Tempe, Arizona? Honeywell Aerospace is the largest manufacturer of aircraft engines and avionics, as well as a producer of auxiliary power units (APUs) and other aviation products. Headquartered in Phoenix, Arizona, just minutes west of Tempe, AZ.

Appareo is a very, very interesting story.

A reader sent me the alert, proud to say his son works for the company.

I found it interesting the company was headquartered on the west side of the Red River, and not in Minneapolis. There are some huge avionics companies in MSP.

We Start The Day With 29 Active Rigs In North Dakota And Nearly $50 WTI Oil Going Into Memorial Day Weekend -- May 27, 2016

Active rigs:

Active Rigs2984190187214

RBN Energy: natural gas faces increasing competition in Texas.
With storage inventories soaring to record-high levels and production remaining relatively flat, the U.S. natural gas market is in dire need of record demand this summer to balance storage. All eyes are on power generation to soak up the gas storage surplus. Low gas prices and increased gas-fired generating capacity makes natural gas the go-to generation fuel this year.  However, in the largest summer demand market – Texas – natural gas is facing increasing competition from wind. Wind power still provides a much smaller share of Texas’s power than natural gas, but the addition of several big wind farms in 2015 gives wind a stronger footing in the Texas market this year. Today we take a closer look at the potential impact of growing wind generating capacity on natural gas demand, particularly in Texas.
We talked about the market’s dire need for incremental, even record demand recently. The gas market started the storage injection season in April (2016) with a record storage overhang, and mild weather since then has suppressed demand and limited the market’s ability to whittle down the surplus. However, if we discount the effects of the milder-than-normal weather, demand actually has been exceptionally strong on a degree day basis and could easily reach record highs this year if we get a normal-to-hotter summer weather. But now there is another potential factor that could blunt demand as well – wind generation, especially in Texas. Before we get to that though, first let’s put Texas power generation and wind into perspective.
Raging Bull

Newest nominee for the 2016 Geico Rock Award for not knowing the "Pocahontas" story and how it related to Elizabeth Warren and Harvard University: Three Affiliated Tribes Councilman Ken Hall. Link here. The Geico Rock Award nominees are tracked here.

Speaking of which, I think TAT should consider calling Donald Trump, "Raging Bull."

Raging Bulls


May 27, 2016: talk of a Trump-Sanders debate was just that: talk. DOA. No debate. 

Original Post

Thrilla from Manila.

One small step for man...

Miracle on ice.

The Lincoln-Douglas Debates

Don't ask what your country can do for you ....

I have a dream .....

And now: the debate of the 21st century -- Sanders in the far left corner, and Trump (sort of) in the right corner.

A reminder: Hillary has declined another debate with Sanders.

Mano a mano.

The panel: Megyn Kelly, Simon Cowell, and Jerry Brown.

Venue: Tomorrow Land, Disneyland, California. Alternate: Fantasy Land, Disneyland, California.

Opening act: Taylor Smith.

Fight's on.

Just saying.