Tuesday, June 14, 2016

Completely Off My Radar Scope: First US Nuclear Reactor Since 1996 Soon To Be On-Line -- June 14, 2016; "Ham & Cheese" Goes Down In Flames


June 17, 2016: WSJ has an article on this story.
By summer’s end, authorities expect the new reactor at this complex along the Chickamauga Reservoir, a dammed section of the Tennessee River extending northward from Chattanooga, to steadily generate enough electricity to power 650,000 homes.
Although the opening of a new nuclear facility used to draw protesters and angry rhetoric, the Tennessee Valley Authority’s Watts Bar reactor has been mostly welcomed by local residents — and even some advocates concerned about climate change.
“It’s a big step forward for clean energy, and we really have to be pushing that as hard as we can for the sake of the climate – all sources of clean energy, which includes nuclear,” said MIT atmospheric scientist Kerry Emanuel.
He and a group of influential climate scientists, led by former NASA researcher James Hansen, have recently made a strong push for nuclear, arguing that the energy source “will make the difference between the world missing crucial climate targets or achieving them.”
But while nuclear reactors account for the lion’s share of the carbon-free electricity generated in the United States, the industry faces this new set of circumstances in a state of near-crisis. A combination of very cheap natural gas and deregulated energy markets in some states has led to a growing number of plant closures in recent years.
Original Post
So, how much does a nuclear energy plant cost these days?

$4.7 billion / 1,150 MW = 4,700,000,000 / 1,150 = only $4.1 million / MW.

Compare with costs for a new natural gas plant, or an unreliable politically correct power plant over at this link

The new nuclear reactor is pictured at this link: it looks pretty surreal, pretty futuristic.
The Tennessee Valley Authority's (TVA) Watts Bar Unit 2 was connected to the power grid on June 3, becoming the first nuclear power plant to come online since 1996, when Watts Bar Unit 1 started operations.
Watts Bar Unit 2 is undergoing final testing, producing electricity at incremental levels of power, as TVA prepares to start commercial operation later this summer. The new reactor is designed to add 1,150 megawatts (MW) of electricity generating capacity to southeastern Tennessee.
From wiki:
The plant, construction of which began in 1973, has two Westinghouse pressurized water reactor units: Unit 1, completed in 1996, and Unit 2, completed in 2015. Unit I has a winter net dependable generating capacity of 1,167 megawatts. Unit 2 has a projected capacity of 1,150 megawatts.
Construction began in 1973. Does anyone even remember who the US president was in 1973...going backwards...Obama, Bush, Clinton...Bush, Reagan... you mean you have to go back this far...Carter? Nope, even farther back: to Richard M. Nixon, 1969 - 1974, who I think had more integrity than most since then .... at least on some level. I doubt anyone agrees with me. Whatever.

That Double Slaying In Williston

No charges filed. The shooter has left the building. And the state.


Most Willistonites were heard to say: "It could have been worse."

One question not yet answered: was the car ever sold?

"Ham And Cheese" Referendum On Today's North Dakota Primary Ballot

And the results...corporate farming in ND goes down in flames ...

Pretty clear, huh?

So, what does "no" mean, and what does "yes" mean?

A vote "for" the measure would uphold Senate Bill 2351, which allows domestic corporations and limited liability companies to own and operate dairy farms and swine production facilities on no more than 640 acres of land. A vote "against" the measure would repeal Senate Bill 2351.

Poll: Will There Be More Or Will There Be Fewer DUCs In The Bakken Report Tomorrow, April, 2016, Data? -- June 14, 2016

From last month's Director's Cut, the March, 2016, data:
DUCs? 920. That's up 13 from the end of February to the end of March. Almost a thousand DUCS. Incredible.
It's my impression that more wells are reaching TD than are being fracked; more wells are reaching TD than producing wells are being fracked. This suggests to me that the number of DUCs in the Bakken should be higher in April, 2016, than March, 2016, but it seems my impressions are always at odds with the NDIC data.

So, a poll. This is going to be a quick one.

If the data for March, 2016, showed 920 DUCs in the Bakken then, how many DUCs will be reported in the Director's Cut for April data, which should be released Wednesday, 11:00 a.m., a little over 12 hours from now?

The poll: the number of DUCs in the Bakken in April, 2016, will be:
  • more than 920
  • less than 921 
Again, this will be a quick poll. The poll closes out when the Director's Cut is posted; hopefully I don't miss it. I'll trust folks not to vote after the poll is released. 

Again, my data suggests the number of DUCs will increase, but it seems the NDIC and I "count differently." LOL.

Four (4) New Permits -- But Not Much Else -- June 14, 2016

Active rigs:

Active Rigs2875187184214

Wells coming off the confidential list Wednesday:
  • 31898, SI/NC, XTO, JMB 14X-15B,Capa, no production data,
  • 31998, drl, Hess, CA-Stangeland-155-95-2128H-10, Clear Creek, no production data,
  • 32176, SI/NC, XTO, Tobacco Garden 31X-29CXD, Tobacco Garden, no production data,
  • 32260, SI/NC, Statoil, Enderud 9-4 7TFH, Banks, no production data,
Four new permits --
  • Operator: XTO
  • Field: Bear Creek (Dunn)
  • Comments:
Five permits renewed:
  • XTO (3), three Lawlar permits, McKenzie County
  • Ballard Petroleum, a Barton Trust permit, Bottineau County
  • Crescent Point Energy, a Dressler permit, Williams County
No producing wells completed.

The Road To New England -- A Forbes Udpate -- June 14, 2016; Uff-Da

Forbes has a long article / interview comparing two different models "to keep the lights on" in New England and in Texas. Both models have significant problems.

The article is too long and too complicated to provide bits and pieces so I will simply link it. If the link is broken, the article has been archived.

But two things jump out at me:
  • this problem creates an opportunity for engineering students with an energy background (and possibly an MBA)  looking for their first job
  • this problem might lend itself nice to Federal "energy" insurance much like Federal hurricane or commercial earthquake insurance
It is a bit of irony, I suppose, that in a country with access to incredibly inexpensive fossil fuel, we have this problem at all.

Market Update And All That Jazz

Posted around 2:55 p.m. Central Time. 

So, what did the market do today? What's in the news?

  • new 52-week highs: 52 including Duke Energy, NextEra Energy
  • new 52-week lows: 45
US retail sales rose "strongly" in May, increasing 0.5% after surging 1.3% in April. Economists had forecast a more modest 0.3% increase, so this is good news, I guess. The market was held back, apparently, due to concerns about Brexit.

How's the 2Q16 GDP forecast looking?
The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2016 is 2.8 percent on June 14, up from 2.5 percent on June 9. After this morning's retail sales release from the U.S. Census Bureau, the forecast for second-quarter real personal consumption expenditures growth increased from 3.5 percent to 3.9 percent.
The Washington Post headline: cable and telecom companies just lost a huge court battle on net neutrality. A federal appeals court sided with President Obama and Google, I guess, requiring intern providers such as Verizon and Comcast to obey federal reglations that ban blocking or slowing of internet traffic to consumers.
  • Verizon: up slightly; up 0.7%; pays 4.3%; priced at 12x earnings
  • ATT: up slightly; up 0.33%; pays 4.8%; priced at 17x earnings
  • Comcast: up slightly; up 0.4%; pays 1.75%; priced at 19x earnings
  • on May 23, 2016: 22 cent/share
  • yesterday: 51 cents/share; today down to about 48 cents
 Minor Note: Par Pacific Holdings To Acquire Refinery, Gathering System

An eagle-eyed reader caught this one: Par Pacific Holdings to acquire Wyoming refining and related logistics assets: will establish downstream presence in the Rocky Mountains. Data points from the press release:
  • 18,000 barrels per day refinery
  • Strategic logistics asset base with 140 mile crude gathering system, 40 miles of refined product pipelines, and 650 MBbls of tankage
  • Refinery was expanded from 14,000 to 18,000 barrels per day at the end of 2015
The gathering system caught my eye.

Price: $275 million (rounded).

Laying new pipeline runs about $1 million / mile (personal rule of thumb).

And then the Bakken connection:
In addition to the refining assets, the transaction includes the 140-mile Thunder Creek crude oil gathering system in northeast Wyoming that sources crude oil from the Powder River Basin. 
The Thunder Creek gathering system is also connected to the Butte pipeline, which allows Wyoming Refining to directly access Bakken crude from North Dakota
The transaction also includes a 40-mile clean products pipeline system that serves the Rapid City markets through the Magellan Products pipeline, two truck racks, a proprietary jet fuel terminal in Rapid City and a jet fuel pipeline that connects Wyoming Refining's proprietary aviation fuel terminal to Ellsworth Air Force Base.   
Any update on the Dakota Access Pipeline in Iowa? Yup. Work has begun in Iowa on the pipeline. The project faces at least five lawsuits. An opposition group self-identified as "Bold Iowa" says 60 CAVE dwellers have signed a pledge to risk arrest if necessary in nonviolent protests. They did not use the term "CAVE dwellers" in their communique. They simply said "members."

Most recent on Katie Ledecky, from June 6, 2016, the "Arena Pro Swim Series": Katie Ledecky in first place with 55 points; #2, Maya DiRado with 42 points; #3, Melanie Margalis, 38 points; #4, Leah Smith, 36 points; and #5, Missy Franklin, 31 points At the linked site, it appears that Ms Ledecky is turning down tens of thousands of dollars to remain eligible to swim at Stanford this autumn. The male and female winner of the series will receive a BMW lease and a $10,000 series bonus. As noted, Katie will turn those down even if she happens to win the series.

Uff-da. (see wiki)

Tuesday, January 14, 2016

Still waiting for the Director's Cut; link here. I'm being told it will come out Wednesday, June 15, 2016. When it comes out, one can find the monthly production report here. In anticipation of the release, this Reuters report: US shale output to dip for 7th consecutive month -- EIA -- note, this is for JULY production ... looking 45 - 60 days ahead, whereas we will see data that is 45 - 60 days old.
Bakken production from North Dakota is forecast to fall 32,000 bpd, while production from the Eagle Ford formation is expected to drop 63,000 bpd.
Production from the Permian Basin in West Texas is expected to drop 7,000 bpd.
U.S. shale oil output is expected to fall in July for the seventh consecutive month. Total output is expected to fall 118,000 barrels per day (bpd) to 4.723 million bpd in July, according to the U.S. Energy Information Administration's (EIA) drilling productivity report. NOTE AGAIN: this is SHALE OIL production projected for July, 2016.  
Active rigs:

Active Rigs2875187184214

RBN Energy: The Domino Effect audio book -- what the shale revolution really means.

By the way, what did the market do yesterday? Despite being a down day on the market, there were 112 new highs vs 38 new lows. New highs included: Duke Energy, XOM, Kellogg, NextEra, Xcel Energy.

Here's an investment idea: the German bond. Now paying .... drum roll ... zero percent. The German 10-year sovereign bond yield turns negative for first time. I would comment on the Greek bond as an investment, but I've never understood bonds. I understand what bonds are and why they exist; what I don't understand is how to invest in them. Of course, I could probably say the same about equities.


Time to close out these two polls. The first poll in which we asked, if you had a vote, would you vote for OPEC to set production limits?
  • yes: 52%
  • no: 44%
  • other: 4%
The results of the second poll in which we asked, was the "Saudi Surge good/bad/indifferent for th Bakken?
  • good: 15%
  • bad: 43%
  • indifferent 40%:
  • other: 1%