Saturday, July 30, 2016

Nothing About The Bakken -- Jumping Out At 25,000 Feet With No Parachute; Also, Times Magazine Long Article On Katie Ledecky -- July 30, 2016

The Katie Ledecky Page

From The New York Times Magazine, "The Olympics Issue," -- The Phenom
Katie Ledecky is so nice. So normal. “She’s a better person than a swimmer,” says her coach, Bruce Gemmell — a comment that, strictly speaking, would put her in the running for best person in the world. After she came home from London in 2012 with an Olympic gold medal, she rejoined her high-school swim team in Bethesda, Md., and when she wasn’t in the water, she stood and cheered on her teammates. At lower-level meets that she’s not attending, members of her club team can count on texts from her: Good luck! Swim fast! She stands just under six feet, but her coach insists that she is shorter than most of her rivals, which is not the case but advances the conceit of Katie being, well, normal.
Ledecky, 19, is also happy, seemingly just about all the time. When you start listing the factors that make her so freakishly good at what she does, being freakishly happy has to rank very high. She rarely has anxieties about her swimming or anything else, and when she does, she says: “I can get rid of them. I’m pretty good at doing that. If I’m worried about something, I’m able to make myself just think about something else.”
The sport she has come to dominate makes almost impossible demands of the body and spirit. It imposes a ratio of hard training to exhilaration that is depressingly out of whack.
Top swimmers train as often as nine times a week, 50-plus weeks a year, with their heads submerged in water for two or more hours at each of those sessions. What they hear is the rhythm of their own strokes, their teammates’ kicking, their coach’s muffled voice.
One of the sport’s cruelties is that all this extreme training produces, on the whole, lackluster competitive performances. Swimmers try to peak just once or twice a year, and they prepare for these occasions in scientific and ritualistic ways. They swim fewer yards in the weeks leading up to a big competition, in order to be rested and fresh. They also, on the eve of major races, shave: women their legs and arms, men their legs, arms, chests, backs and sometimes their heads. The idea is to feel sleek and fast in the water.
In 2012 in London, Ledecky, a little-known 15-year-old, won the gold medal in the 800-meter freestyle, defeating Rebecca Adlington, a British swimmer and world-record holder so heavily favored that Prince William, Kate Middleton and other members of the British royal family were in attendance at the Olympic aquatic center, anticipating a coronation. As the crowd chanted Adlington’s name, Ledecky channeled its energy and imagined the shouts were “Ledecky, Ledecky, Ledecky.”
In the four years since, she has been on a world-record spree, setting them at all times of the year and over a stunning range of distances. First she established her supremacy in the distance freestyles, then she took command of shorter events. She is now the world’s top female swimmer in the 200, 400, 800 and 1,500 freestyles. She is among the best Americans in the 100 free. No swimmer has conquered this combination of distances in nearly half a century, and to many in the sport, her achievement is hard to fathom — it would be like the Jamaican star sprinter Usain Bolt taking up and winning mile races.
So much more at the link, including vignettes about breaking more of her own records.

Ultimate Adenaline Rush?

The CLR Holstein Federal Wells, Elm Tree Oil Field -- July 30, 2016

Assuming there are no errors in the production profile or issues with commingling, this is an incredible well:
  • 27564, 1,235, CLR, Holstein Federal 2-25H, Elm Tree, 40 stages, 4 million lbs, t2/15; cum 485K 1/17; still without a pump, as of 1/17;
Monthly Production Data

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

CBR: The Tale Of Two Countries -- July 30, 2016

A couple days ago I posted a link to an article from The Wall Street Journal about the decline of CBR in the US. I made the comment that CBR was a solution for a problem that no longer existed.

Perhaps I spoke too soon, or perhaps it is simply a tale of two countries, but an alert reader noted this article in The [London] Globe and Mail: the death of the Keystone XL means record revival for Canadian railways. One wonders how much worse Canada's economy (May's GDP) would have contracted had it not been for the demise of the Keystone XL. From the linked article:
Keystone was the great hope for opening U.S. markets further to Canadian crude. Now that it’s dead, the railways are going to make not just a comeback, but transport more oil than ever before.

The Keystone XL pipeline was set to carry heavy Canadian crude south from Hardisty, Alberta’s oil hub, before being blocked by President Barack Obama last November, largely on environmental grounds. In a sign of what’s coming, exports by train rose 23 per cent in April, the biggest year-on-year jump since September 2014, according to Canada’s National Energy Board.

That’s just the beginning. Next year, with about a half dozen new projects and expansions in the oil sands, rail exports could double by the third quarter to a record, said Eric Peterson, research chief at Denver-based ARB Midstream LLC, an oil transport investor. That’s good news for USD Group LLC, Imperial Energy Corp. and Cenovus Energy Inc., all of which invested in new rail terminals or plan on expanding older ones this year.

“That production has to find an alternative source of take-away and that’s where rail comes in,” said Brad Sanders, chief commercial officer of USD Group, which plans to double capacity at its Hardisty terminal within 12 months to four trains a day, each of which could carry 65,000 barrels. “We expect from this point on that activity to grow.”

The capacity of existing pipelines is 4 million barrels a day, opening an opportunity for rail carriers. Crude output is expected to rise about 5 per cent to more than 4 million barrels a day in 2017, according to the Canadian Association of Petroleum Producers. Keystone XL would have augmented pipeline capacity by 830,000 barrels a day, an addition of more than 20 per cent.

“We are going to have to see some pretty significant volumes move by rail,” Peterson of ARB Midstream said by phone. “Every new incremental barrel of production that comes out of Canada will have to go by rail” once the pipelines are full, he said.

After two years of declines, rail transport rose to 109,000 barrels a day in April, a number that Peterson says will double by next year and could reach 450,000 by 2018.
Much, much more at the link.

So many story lines, least of which how killing the Keystone XL may have "saved" what little was left of the manufacturing economy in Canada when the price of oil plummeted.  

The Apple Page

I knew it was "big." I did not know it was that big. From Market Watch:
The historic surge in Apple Inc.’s stock on Wednesday is finally giving investors something other than declining iPhone sales to talk about, and could confirm what Warren Buffett may have believed several months ago, that a bottom has already been seen.
The stock ran up 6.5% to close at a three-month high. The split-adjusted price gain of $6.28 was the second-biggest one-day rise in Apple’s history, in the wake of the technology giant’s better-than-expected quarterly results. It was just behind the biggest-ever gain of $7.10 on April 25, 2012. (A 7-for-1 stock split went into effect on June 9, 2014, meaning the actual April 25, 2012 price gain was really $49.72).
The Conway Twitty Page

Don't Cry, Joni, Conway Twitty

The Whims Of Government; No Text-Enabled Cell Phone, No Access To On-Line Social Security Account; Want To Vote? Just Give Us A Name, Any Name Will Do -- July 30, 2016

The federal government and the courts seem not to worry about identify theft when it comes to voting -- "no photo IDs required" seems to be the "rule."

But when it comes to access Social Security on-line, one needs to have a smart phone, or at least a text-capable phone as of August 26, 2016. Those of us, without a text-enabled phone, will not be able to access our on-line social security account.

From the SSA yesterday:
Starting in August 2016, Social Security is adding a new step to protect your privacy as a my Social Security user.
This new requirement is the result of an executive order for federal agencies to provide more secure authentication for their online services.
Any agency that provides online access to a customer’s personal information must use multifactor authentication.
When you sign in at with your username and password, we will ask you to add your text-enabled cell phone number.
The purpose of providing your cell phone number is that, each time you log in to your account with your username and password, we will send you a one-time security code you must also enter to log in successfully to your account.
Each time you sign into your account, you will complete two steps: Step 1: Enter your username and password. Step 2: Enter the security code we text to your cell phone (cell phone provider's text message and data rates may apply).
The process of using a one-time security code in addition to a username and password is one form of “multifactor authentication,” which means we are using more than one method to make sure you are the actual owner of your account.
If you do not have a text-enabled cell phone or you do not wish to provide your cell phone number, you will not be able to access your my Social Security account.
And since "data rates may apply," I guess a type of "poll tax" has been placed on those who want to access their account on line. 

US GDP, The Recovery, And Jobs -- July 30, 2016

Three interesting articles and graphics in today's WSJ.

First, US GDP grew a disappointing 1.2% in second quarter. Economic growth ws well below expectations; cautious business investment offset robust consumer spending. Economic growth is now tracking at a 1% rate in 2016—the weakest start to a year since 2011—when combined with a downwardly revised reading for the first quarter. That makes for an annual average rate of 2.1% growth since the end of the recession, the weakest pace of any expansion since at least 1949.

Second, an op-ed, make America grow again. The economy is stuck on 1% growth as business investment stalls.

And, finally, the third article, over at "Heard on the Street," that ties everything together -- lack of business investment and "stellar" job reports over past several months: the divide between GDP and jobs.
Even so, the message from the GDP report is that the economy is growing only slowly—a message greatly at odds with labor market readings. In the first six months of this year, the economy gained over one million jobs. If the historical association between GDP and employment growth from before the financial crisis held, about 400,000 fewer jobs would have been added.
One explanation for why GDP figures and labor-market data seem at odds may be that economy’s productivity problem is even worse than believed. Under this view, years of weak investment spending have cut into companies’ efficiency gains, so that even slight increases in demand compel them to hire. With much of the labor markets’ slack already taken in, they must pay up more to get the workers they need.
Or the GDP-labor divide may be driven by a situation where the U.S. economy is experiencing decent domestic demand in a world that is very weak. Manufacturers making globally traded goods see little reason to invest, while American oil producers, facing low prices that have little to do with what’s happening domestically, are retrenching. That cuts into GDP growth, but since these industries represent only a small portion of employment, the effect on job growth is muted.
Either scenario suggests that weak GDP and steady job growth could persist through the rest of the year.
Of course, nothing is mentioned about a) the anti-business mentality in the West Wing; b) the EPA; c) ObamaCare; d) the thousands of regulations promulgated by this administration.

The editorial -- the second linked article -- did mention some of these. 

NextEra (Florida) Buys Controlling Stake In Biggest Power Provider In Texas -- July 30, 2016

This is a story that perhaps would have meant nothing to me. I'm not sure I would have followed it and I'm pretty sure I would not even have posted it had it not been for the Bakken.

While writing about the Bakken over the past few years, there were stories of a Florida utility buying wind farms in North Dakota. It took awhile to connect the dots.

The utility was Florida Power and Light, and then FPL, and then NextEra. I assume it's the largest utility in Florida.

Well, now it may just become the largest utility in Texas. In today's WSJ:
NextEra outbid rivals for Energy Future Holdings Corp's controlling stake in the biggest power provider in Texas, in an $18.4 billion deal that thrusts the Florida company into the big leagues among US utilities.
Some data points and excerpts from the article:
  • selling Dallas-based Oncor was vital to lifting Energy Future out of bankruptcy that has gone on since 2014
  • Energy Future was the former TXU Corp
  • Oncor: widely regarded as Energy Future's crown jewel
  • NextEra has morphed into a national electric powerhouse by purchasing unregulated renewable-energy projects across the US
  • NextEra also appears eager to expand into regulated utilities
  • NextEra tried, failed to buy Hawaiian Electric Co
  • Oncor: 10 million homes
  • Warren Buffett was the final rival, but he caved after multiple rounds of bidding
  • the deal still requires regulatory approval
I think the bigger story line here is the melding of unregulated unreliable energy with regulated reliable energy and how a utility with a national footprint will manage it. My hunch is that NextEra has a lot of lobbyists in Washington, DC, and probably competing for White House appointment slows with Eric Schmidt. 

From Dallas Morning New:
NextEra has 23 wind farms in Texas with the capacity to generate about 3,100 megawatts of power. Its Lone Star Transmission unit has about 330 miles of power lines from northwest of Abilene to Navarro County.
It has 542 miles of natural gas pipelines in southern Texas. It owns Gexa Energy, an electricity retailer in Houston, and has a fiber-optic network that provides broadband access to business.
Meanwhile, coal is struggling here in Texas. This was back in April:
Until coal plants start shutting down or the state tweaks regulations to artificially inflate prices, power companies will struggle, executives said. A new Moody's Investors Service report concluded that Texas "power prices are unlikely to climb out of their doldrums."
Already, less than a quarter of Texas' coal fleet is operating early this spring, as more generators simply take their coal plants offline until the summer heat brings more demand.
In March, wind added to the grid more than coal power for the first time ever for a full month. Wind contributed 21.4 percent of the grid's overall power, compared with 12.9 percent from coal, which used to be the dominant source of the state's electricity generation, according to the Electric Reliability Council of Texas, which manages about 90 percent of the state's electricity load.

Failed Turkish Coup

Even after the fact, Turkish government can't find any hints of a coup in millions of encrypted messages prior to the coup.

This whole thing ...

Canadian GDP Plummets, Contracts; WTI Ends The Month With Worst Monthly Loss In A Year -- July 30, 2016

For the archives: Canada's GDP for the month of May, 2016, dropped the most since 2009 due to wildfires out west. Wow, this is bad. Not only did the GDP "drop," the entire Canadian economy contracted 0.6%. A negative 0.6% GDP. And April was not much better: the Canadian economy expanded -- if one can use that word -- 0.1% in the month of April.

The contraction in May was due to the record 22 percent plunge in non-conventional oil production (i.e., oil sands). Excluding oil sands, Canadian output shrunk 0.1% in May. Manufacturing fell 2.4%, the fastest since 2009; and a 15% drop at oil refineries.

Oil ends July with the worst monthly loss for WTI in a year. Reuters reports. WTI was down 15% by the end of the month from where it started at the beginning of the month.

Porsche Marketing With Better Gas Mileage

I wonder how many folks know that the Porsche 718 Boxster S runs on a flat four-cylinder engine. From Dan Neil, the car guy over at The Wall Street Journal:
The 2.5-liter turbo four in the new Boxster S produces 35 more hp (350 hp), with two fewer cylinders and nearly a liter less displacement than the naturally aspirated 3.4-liter six. Porsche says the flat-four cars get on the order of 15% better fuel economy on the European driving cycle.
The specs show EPA fuel economy: 21 / 28 / 24 mpg, city / highway / combined.

Yes, I have never considered a Porsche due to the poor gasoline mileage but I guess I can't use that excuse any more.

Price? Well, it will compete with the current Tesla models available. The 2017 Porsche Boxster S: base price of $73,000; as tested by Mr Neil, $93,000.

I have trouble believing anyone buying an entry-level Porsche for $100,000 is seriously concerned about mileage, especially now that gasoline is well below $2.00/gallon in many parts of the US.

Mr Neil says the better gas mileage "bends the curve of Porsche's CAFE numbers." Wow -- at 24 mpg, one wonders how "awful" the flat-sixes are.

The article can be found in today's WSJ. It explains why Porsche is gong to flat-fours for all of its "starter sports cars": Cayman and Boxster.

By the way, I never knew "Caymans" were "starter cars for Porsche. That puts things into perspective around here where I see a lot of Caymans. Just like the BMW 3-series, I guess. When we were in Europe for 13 years, no one was caught dead in a BMW 3-series; if one had a BWM in Germany, it was a 5-series or a 7 series. But here in the states, folks settle for the 3-series much more often, it appears. I didn't realize that until I returned back to the states in 1996. I'm not sure I even knew the BWM 3-series existed until I got back to the states. A starter car. LOL.

By the way, my second car, a 1973 Chevy Nova SS, with a base price of under $3,000, would have compared nicely to the Porsche starter car, if comparing "bang for the buck."

Fastest EV Is Not A Tesla

It's a Corvette EV at this link:

A 2006 Corvette Z06 has been converted to an all electric drivetrain and it just beat the land speed record for an street legal EV at 205.6 mph.

Week 30: July 24, 2016 -- July 30, 2016

Internationally, there were a lot of stories this past week on how the Panama Canal Expansion was changing the order of things in energy, especially with regard to US LNG exports.  Platts had just one of many stories but a browser search will bring up many, many more.

I also posted a story on surging petrochemical demand around the world. ExxonMobil and Saudi Arabia are in discussions about a possible joint venture petrochemical plant in along the US Gulf Coast, in Texas or Louisiana.

In perhaps the most ludicrous story of the week, Bloomberg suggested that the world may need to depend on Russia to meet oil demand in the next few years. Actually, there was one story even more ridiculous: SecState Kerry said that air conditioners were more dangerous than ISIS.

WTI flirted with $40 this past week, and the government provided the first official estimate of GDP for 2Q16: a horrendous 1.2% -- not even half of a the tepid 2.6% analysts had expected. And, of course, with revisions (there will be two), it's possible that the 1.2% number will go down. Or go up. Or stay the same. Chevron, ExxonMobil, and COP all reported disappointing earnings for 2Q16. The way things are going in this third quarter, it may get worse before it gets better. Assuming it gets better.

I think we will look back on the recent jump in the number of active rigs in North Dakota as "jumping the gun." It now seems it was too soon to start bringing rigs back in but things looked differently in early 2016 when the decisions were made to contract for new rigs.

Outside the Bakken, CLR reported its record well in the Meramec, STACK, Oklahoma. Devon reported something similar a week earlier.

Home ownership in the US is at a 51-year low, another arrow in the president's quiver labeled "Legacy." But there are mixed messages: it was also reported that June home sales were the highest in more than eight years; with a seasonally-adjusted rate of almost 600,000 homes, it was the best month since February, 2008.

Tesla declared that its giga-factory in Nevada is now open for business. The factory itself is 14% complete. I assume the "14%" is the front end where the Tesla's press office is.

I posted a book recommendation; the book can be bought at Books on Broadway in Williston, or on Amazon, including a Kindle edition.

With regard to the Bakken, the trend right now is not so many new permits, but lots and lots of renewed permits. Although mentioned once before, there is now a new operator in the Bakken -- perhaps not an operator but an "energy management company" -- a company that owns acreage and wells but contracts out to others to actually do the heavy lifting -- like drilling and producing and transporting. In this case, it is Foundation Energy Management out of Dallas, TX, I believe. It appears they acquired a package of North Dakota Madison wells from Whiting.

Now, to the Bakken itself:

North Dakota active rig count jumped to 35 from an "average" of 30 the previous week
The Mergent Group reports that Bakken DUCs have risen to nearly 1,000
Mike Filloon provided an update

An update in The WSJ: like man-camps, a solution for a problem that no longer exists

Bakken Economy
Update on the new Williston airport