Thursday, June 2, 2016

Down To 25 Active Rigs In North Dakota -- June 2, 2016

Active rigs, we've been here before, but 25 is the post-boom low for active rigs in North Dakota:

Active Rigs2581188187215

No new permits.

Wells coming off confidential list Friday:
  • 31657, SI/NC, Hess, BB-Budahn 150-95-0506H-7, Blue Buttes, no production data,
  • 32204, SI/NC, SM Energy, Bison 2B-28HN, Ambrose, no production data,
Four (4) permits renewed:
  • Statoil (2), one Jennifer and one Allison permit, both in Williams County
  • CLR, two Berlain permits, both in McKenzie County
About as quiet as it gets.


A reader sent a picture of the tank battery at the Whitman-Hawkinson pad. Look at the size of those tanks:

Although I need to update the page, the Whitman / Hawkinson wells in Oakdale field are tracked here.

Debbie Downer -- June 2, 2016

And then they wonder why retail investors are afraid to invest.

These must be the same guys are warn us about global warming, how a 0.1 degree increase in global temperature will destroy earth as we know in 100 years from now.

Meanwhile, one of the more successful investors in the past century has quietly increased his stake in Phillips 66. As of May 23, Berkshire Hathaway, Buffett's massive conglomerate, held a 14.88 percent stake, or more than 75 million shares, in Phillips 66 worth $6.17 billion.


We'll come back to this later.

Wal-mart to use drones to inventory massive distribution centers

Gasoline Demand; Carpe Diem; Unpacking Boxes, Reminiscing Through Photos -- June 2, 2016

Gasoline Demand (dynamic link here):

The 4-week average increased just slightly below 4% year-over-year. We continue to get closer to the 10 million bopd threshold, which I believe, would be a record.

 Other Blogs

Last night I had the opportunity to visit some of my favorite blogs. One of them is Mark Perry's Carpe Diem, once a stand-alone, now part of AEI. Look what Mark wrote last night: "A 'hat tip' to Warren Meyer of the Coyote Blog who originated the Venn diagram approach to highlight intellectual inconsistencies.

If readers have any suggestions for blogs I might like, please feel free to send me suggestions.

I get some wonderful long "essays" in private e-mails from some readers. I may not reply to all of them, but I get to most of them.

A Note To The Granddaughters

We were stationed in Turkey back in 1994 or thereabouts. After leaving, there were a few boxes we never got around to unpacking. Between that move from Turkey to our most recent move one month ago, some unopened boxes made a half-dozen more moves: Turkey to Prattville, AL, to Langley AFB, VA, to San Antonio, TX, (three different locations/three moves) and then to DFW area (two different moves.

We finally opened the last of those boxes. We now have a few boxes in storage but they are new, mostly books.

We numbered all our boxes when moving and placed an "inventory" on the outside. The numbering was by room/location. So this was Box #3 from the storage closet. It included memorabilia from Williston's centennial celebration (1989) and darts from England, where we were stationed in 1990. The F-15 Eagle plaque from our first (1983) tour or our second (1991) tour at Bitburg AB, Germany.

The Bakken Meme Articulated In India; Taking A Pause; Looking At Other Blogs -- June 2, 2016

The market continues to climb the "wall of worry." Oil takes an interesting turn in light of the news coming out of Vienna. This suggests to me that oil traders had priced in the expected OPEC outcome. 

Last night I had the opportunity to visit some of my favorite blogs. One of my favorite site is The Coyote Blog. I've long forgotten how I came across this blog. The writer never fails to interest me. He seems to be most fair and balanced when it comes to a) global warming; and, b) light rail. He is certainly more fair and balanced than I am on these subjects and that makes him more credible.

I was going to write that regardless, but coincidentally, The Coyote Blog has a great piece on global warming posted today. Amazing. The coincidences. Another must read: a nice link from Megan McArdle. That link will take you to Megan McArdle at Bloomberg. Note: just because I link/post something, it does not mean I have read all of it closely or whether I agree with any or all of it. I often post things because it is a) good writing; and/or, b) provides an interesting perspective.

The Bakken Meme

Years ago, when I first started the blog, I mentioned that there are three "Bakkens." I forget how I broke the three "Bakkens" down or exactly how I described them, but they were something along this line:
a) the geographical Bakken in North Dakota and how it has changed the economy in the Williston Basin;
b) the Bakken phenomenon worldwide: how technology lessons learned by operators in the Bakken spread to the Permian, the Eagle Ford, and the Niobrara, just to name a few plays; and,
c) the Bakken political/economic handshake -- where the private sector, the public sector, the oil and gas industry, the local and state government, the media -- where "everybody" involved in the process worked in a positive manner to make it happen. Naysayers were pretty much marginalized.
Somehow, those three "Bakkens' morphed into a meme, where the "Bakken" now symbolizes something for everyone around the world.

Just how far has the Bakken meme spread? All the way to India. Look at this:

From Bloomberg:
The casualties of the U.S. shale bust are being offered a new frontier thousands of miles away in India to remake their fortunes. 
Prime Minister Narendra Modi is striving to woo investors to develop already discovered but untapped smaller oil and gas fields that hold more than India’s total annual output. 
The South Asian nation depends on energy imports, a risk Modi is seeking to tackle as the fastest expansion among major economies turns India into a center of global oil demand growth.
"Entrepreneurs who have capped their wells in Alberta or North Dakota will be looking at this kind of a story with a greater amount of interest, as there’s very little to look forward to in their own fronts,” Atanu Chakraborty, the head of oil regulator the Directorate General of Hydrocarbons, said in an interview on Tuesday. 
India isn’t fussy about who takes up the challenge -- whether foreign wildcatters or local internet tycoons looking to diversify their investments -- as long as they’re serious and have the money needed, Chakraborty said. The government is offering incentives such as simpler permits, tax sops and freedom from pricing restrictions to overcome the deterrent that low oil prices pose to boosting production.
India’s robust domestic consumption is a buffer against the risk that prices "can fall again or will remain low," Chakraborty, 56, said in the interview in his office in New Delhi.
State-run Oil & Natural Gas Corp. dominates exploration and production in the South Asian nation. Faced with maturing large fields, the company has struggled to stem the drop in India’s oil output in recent years.
The $2 trillion economy imports about 77 percent of the crude and gas it needs. The 67 already-discovered small fields Chakraborty is trying to develop hold about 625 million barrels of oil and gas.
Foreign explorers such as Canada’s Niko Resources Ltd. and Edinburgh-based Cairn Energy Plc grew businesses in India after starting with smaller fields. At the same time, the companies have faced challenges ranging from arbitration spats with the government to tax disputes, underscoring the regulatory risks that some investors fear in India.
The Intellectual Stammerer

It was just eighteen (18) hours ago when I asked whether this was done on purpose. Now we know. It has been confirmed that this is an example of intellectual stammering. This has been reported on at least since 2011. There are numerous links: simply google "intellectual stammering." You don't even need to add "Obama."

Intellectual stammering is real; it is practiced; it is honed; it is not stuttering. Well done, Mr President.

June 1, 2016

The most well-known individual who was best at this: William F. Buckley.

Breaking News: Ohio's ObamaCare Plan Collapses -- June 2, 2016: An Economic Supernova

From the Last Embassy, posted today:
“Ohio's Obamacare plan has closed up shop, making 13 out of 23 consumer-oriented-and-operated plans to shutter.

InHealth Mutual in Ohio will shut down and will force more than 20,000 people to choose new plans. They will have 60 days to find a new plan. Ohio's insurance regulator said Thursday that it had to take control of the co-op because of major losses.

The Ohio co-op is the first one this year to close. Last year, 12 of the 23 taxpayer-funded plans shut down due to mounting financial losses and a lack of federal funding.

Including InHealth, the federal government has spent $1.3 billion to set up the co-ops, which were created to offer more competition on Obamacare's exchanges.” - Ohio Obamacare co-op collapses, Washington Examiner, 05/26/2016.
By the way, that's why ObamaCare doesn't get many headlines any more: this affects 20,000 people. Twenty-thousand people in a state of 12 million people is 0.17% -- yes, not even one out of 100. About 2 out of a thousand. And the 20,000 that lost insurance have been so jerked around over the past decade, getting jerked around again was to be expected. 

The GOP needs to run, not walk, away from ObamaCare. The Dems need to solve this one; they created it.
  • Trump: "Let's make America great again."
  • Hillary: "Let's revisit ObamaCare."
  • Gary Johnson: "Let's elect Hillary." 
This is interesting. In astrophysics, as some stars become bigger and bigger, they eventually collapse under gravitational forces, exploding --- becoming what we call a supernova. The star literally collapses "under its own weight." Supernova are fairly rare but quite spectacular. They are also critical for a universe to become habitable.

One wonders if "we" finally saw an economic supernova in the US. A supernova called ObamaCare.

I don't want to push analogy too far, but note that Type II supernova require a star about 8x more massive than our own sun but not "excessively" massive. The reason FDR's social security system did not fail: it was too massive to collapse. ObamaCare collapsed because it was 8x bigger than previous social programs but it was not "big enough, not massive enough" to prevent its own collapse.  The Dems will need to make it bigger ... and they can do that by making ObamaCare a) a single-payer program; and, b) making the Federal government the payer of last resort.

Of course, Venezuela has already experienced its supernova.

The big question: is Saudi Arabia next -- something we might have to wait until 2030 to see.

2Q16 GDP Forecast: 2.5%; Down From 2.9% Earlier -- June 2, 2016

GDP now, updated yesterday:
The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2016 is 2.5 percent on June 1, down from 2.9 percent on May 31.
After this morning's construction spending release from the U.S. Census Bureau and this morning's Manufacturing ISM Report On Business from the Institute for Supply Management, the forecast for real residential investment growth decreased from 7.9 percent to 4.2 percent, the forecast for real nonresidential structures investment growth decreased from -2.8 percent to -6.5 percent, and the forecast for real government spending growth decreased from 1.2 percent to 0.4 percent.
GDP will be updated again tomorrow. 

Outrun Change

Last night I had the opportunity to visit some of my favorite blogs. One of them is Outrun Change.

Oh, how interesting... I just went to the site again to get the URL and link it and what a surprise: today's post: guesses on long-term impact of shale revolution

Yes, it's a must-read. Seriously.

Anyway, back to what I was going to say.

I do not recall how long Outrun Change has been around, but it seems that it was one of the first blogs I linked. It probably needs to be moved up on my sidebar at the right, along with the other featured linked blogs.

There, done. And for the next few weeks, I've moved "Featured Blogs" up higher on the sidebar.

Outrun Change has seven tabs at the top. Three of them relate to Peak Oil. Really, really good. It's nice to have this history, these archives.

Another tab takes one to a long piece on "improvements in our standard of living and the Price of Everything." It speaks to the choir, but the book review/book report is well worth the read.

Another tab is "Peering Forward." This is the kind of essay that needs to be updated. It would be interesting to see the writer's observations over time with regard to "what comes next." I'm trying to do that at "The Next Big Thing" but it is difficult. Why? Outrun Change suggests it is because things are moving so quickly now.

Right now, if I had to name those who seem to be activist futurists, these names come to mind:
  • Jeff Bezos -- definitely, succeeding beyond expectations
  • Tim Cook -- most likely, but is he a futurist, or simply in the right place at the right time?
  • Mark Zuckerberg -- perhaps; evolving, no longer a revolution
  • the guys over at Google -- most likely
  • Barack Obama -- definitely, in the arena of creeping socialism
  • Vladimir Putin -- definitely, in the arena of "empire building"/ Realpolitik
  • Elon Musk -- definitely, but living on the edge
Look at that list. Some of those will be right on target; others will flame out, crash and burn.

Take My Breath Away, Berlin

Poll: How Would You Vote If You Had A Vote At The OPEC Meeting

Early indications suggest that OPEC (read: Saudi Arabia) will not set production limits.

Poll: is this good news or bad news?

This is one of those polls I wish I had thought of two years ago, and then re-asked every six months. My hunch is the numbers would change over time.

Thursday, June, 2, 2016


Later, 10:05 a.m. Central Time: weekly energy data tweets are starting:
  • US commercial crude oil inventories down 1.4 million bbls
  • refinery utilization: 90%
  • gasoline production hit 9.9 million bbls/day -- just shy of the 10 million bbl threshold
  • gasoline delivered was about 9.7 million bbls/day -- up about 4% YOY
  • crude oil imports up slightly, to almost 8 million bopd; about an 8% increase YOY for past few weeks
Later, 10:02 a.m. Central Time: four of eight French refineries remain shut down; strike spreads; involves ports.  Just in time for tourist summer season. Paris shuts down in August.

Later, 9:58 a.m. Central Time: I thought it felt cooler. Wow, it seems like it is taking forever for summer to arrive here in North Texas. Another day of thunderstorms with a high of 79 degrees, and tomorrow only 78 degrees. It turns out the same thing in London. From Bloomberg: is it really summer? Natural gas trades like it's winter.
The only evidence it’s summer in Britain is the calendar.
The U.K. is as chilly as it was in parts of December, pushing the price of the nation’s main fuel for heating to the highest level in six months.
Same-day gas on the U.K.’s National Balancing Point market rose for a fifth consecutive day, gaining as much as 4.3 percent to the highest level since December 11, 2015.
Temperatures in the U.K. are forecast at 56 Fahrenheit for Thursday [today], colder than what it was six days before Christmas last year.
Later, 7:58 a.m. Central Timefirst time claims for unemployment insurance dropped 1,000 to seasonally adjusted 267,000. Four-week average fell to 276,750. The spinmeisters though the numbers would be much worse due to the Verizon strike, previously posted. So, good news all around. 

Later, 7:41 a.m. Central Timejob growth "cooled" (their word, not mine, over at CNBC) in May -- private companies added 173,000 jobs; forecast by Reuters analysts "hoped for" (my word, not theirs) for 175,000 new jobs. May's numbers were slightly higher than the April numbers which were revised upward to 166,000 new jobs. These two most recent numbers are significantly below the 2016 average of 188,000.

Original Post
The following was done quickly; there will be typographical and factual errors. Some links may be broken. I will fix this post when I get some time.

After this post, my usual morning posts/blogging may be delayed until later today. Family commitments as the school year starts to wind down.

I might not see the jobs data until later today; or because of Memorial Day on Monday, maybe the government delays the data release until tomorrow. Same with "gasoline demand." So, we'll see. But we will eventually get to everything.

In the meantime, one might enjoy looking at some of the other websites/blogs I have linked at the  very bottom of the sidebar at the right. I completely missed that one of my favorite sites, "Grantland" was discontinued back in 2015. Google "grantland wiki" to find out why. Other links:
The "Obama video" that hit the internet yesterday -- and I posted earlier -- has gone viral. I will be posting it again. The video will get a lot of attention across talk radio today. The question is whether the president did this on purpose. I don't know. One can be sure he won't talk about it. He lost his teleprompter and couldn't get a sentence out. At least that's what "they" are saying down here in Texas. A Harvard-trained lawyer.

I see Sanders continues to ask Californians to ban fracking; to stay competitive, Hillary will have to hold her position on fracking -- in which she said in Detroit, she wants to do to fracking what this administration did to the coal industry. 

Active rigs:

Active Rigs2781188187215

RBN Energy: would the Marcellus/Utica benefit from in-region ethane storage?