Babe Ruth World Series, Williston, North Dakota -- 50,000 Expected For The 8-Day Tournament -- August 19, 2016

From The Williston Wire:

Babe Ruth World Series officials expect attendance to hit about 50,000 for the eight-day tournament.

The World Series started on Saturday, Aug. 13 with ten teams from across the US.

The teams and fans were treated to a special banquet on Friday night featuring former Minnesota Twins pitcher Jack Morris.

The Williston Herald's Jeffrey Giuliani was there... Jack Morris knows a thing or two about winning. He led Major League Baseball's American League in wins twice in an illustrious career that spanned 18 years.

And if that wasn't enough, he has four World Series titles to his name to prove it. Morris, a Babe Ruth League alumnus, was the guest speaker at the Aug. 12 Banquet of Champions at Williston State College, ushering in the beginning of the 13-15 Babe Ruth World Series.

A link to the Williston Babe Ruth World Series is at the sidebar at the top. 

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Measuring Wealth

I've said the same thing for years. 

There’re two huge holes in that. The first is that it entirely excludes any defined benefit pensions. That fireman retiring at 55 with a $60,000 a year pension we would think is reasonably wealthy really. This CBO method of measurement defines him as having no wealth – that $60 k a year off into the future doesn’t count. Nor do retiree health benefits and so on and on. It’s simply not a good measure of wealth, especially for the average family where home equity and a pension are likely to be the two major sources of whatever household wealth there is.

For example, someone who has saved into a 401 (k) to produce a $60k a year pension would be defined as having more than $1 million in wealth (yes, that’s the sort of amount you need for such a pension). Someone with a government pension which will pay him $60,000 a year, or even a corporate pension in many cases, will be described as having zero wealth. Whut?

When I talk with financial advisors they often say I need more diversity, some bonds, etc. I mention social security and pension and they say that does not count. Whut?

Week 33: August 14, 2016 -- August 20, 2016

The big Mideast story this week? US pulls out of Riyadh military cell where Yemeni war efforts were being directed. This is not getting much mainstream media play, but it seems like it didn't take much for President Obama to pull the plug. Saudi Arabia appears to be striking out on its own.

Also, out of the Mideast, it is being reported that Saudi Arabia plans to build 16 nuclear reactors over the next 20 years; the first to come on-line in 2022.

"The Ukraine" could very easily be "the October surprise."

In the US, the big non-energy story was the unraveling of ObamaCare.

Internationally, a top energy story: Norwegian oil production highest in 5 years.

The WTI-Brent spread widens, but Brent sold for more than $50/bbl for the first time in a long time. 

Operations
A photograph worth a thousand words
Downspacing in the Bakken -- Filloon 
CLR to sell 80,000 mineral acres in non-core Bakken assets
Breakeven prices continue to drop in the Bakken -- Filloon

Fracking
Mega-fracks in McKenzie County -- Filloon
EPA fracking study back on the table

Pipelines
Dakota Access Pipeline construction halted in North Dakota

Commentary
Price of WTI

Miscellaneous
Mortgage delinquency rates in energy states

Dakota Access Pipeline Construction Apparently Halted In North Dakota Pending Federal Court Review; Will The Dakota Access Pipeline Be Keystoned? -- August 19, 2016

Updates

August 29, 2016: And now for another perspective: the Dakota Access Pipeline and the "law of Christendom." From Indian Country, TodayMediaNetwork. com.

August 26, 2016: every day this situation is not resolved increases the odds that it will be keystoned. We now have reported that a Native American group is flatbedding a 22-foot totem pole all the way from Oregon to North Dakota as a symbol of support. The organizers will make this protest bigger and bigger. My hunch is that if this isn't resolved before September 9, 2016 (scheduled court date), the Federal judge will punt, sending it back for a new environmental review, essentially killing the project. 

August 22, 2016: looking more and more like the Dakota Access Pipeline will be keystoned. Federal judge delays hearing until September 8. Recommends two sides meet in good faith to come to "deal." Meanwhile, operator agrees to stop construction until this winds its way through the court system. The permits have a "drop-dead" date. If the operators aren't careful, this project will be keystoned in North Dakota. A $3.1 billion project stopped by 24 protestors ... and the pipeline doesn't even cross their land. 

August 22, 2016: from KBUR.com --

A judge has denied a request by Iowa landowners to immediately halt construction of an oil pipeline on 15 parcels of their land.

District Court Judge Jeffrey Farrell says in his order posted Monday that a 1989 Iowa law requires landowners to first go to the Iowa Utilities Board to stop a utilities project.

The landowners have sued, saying the board doesn’t have legal authority to give for-profit Texas oil company Dakota Access the right to forcefully condemn private farmland under an eminent domain law for the pipeline.

The landowners’ attorney, Bill Hannigan, says the request will be filed with the board and refiled with the court if it’s rejected. He says it will be appealed to the Iowa Supreme Court if necessary.

Sounds like Dakota Access Pipeline builders better get this segment completed while they have the "get out of jail free" card.

Original Post

Link here.

Gov. Jack Dalrymple has declared an emergency to make more state resources available to manage public safety risks from an ongoing oil pipeline protest near Cannon Ball.
Dalrymple said Friday the declaration allows the state to bring greater resources to bear if local officials need help addressing safety concerns.

Over two dozen protesters have been arrested since last week for interfering with the construction of the $3.8 billion Dakota Access Pipeline that’s designed to carry North Dakota crude to Illinois.

Developers have agreed to halt construction of the project in southern North Dakota until a federal court hearing next week.

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Massachusetts To Tax Uber 

To Support Conventional Taxi Service

I can't make this stuff up. But here it is, at this link.

What if every airline ticket you purchased, tucked amid all of the security fees, taxes, and airport facility charges, included a small additional line item: the Ocean Liner Support Fund, to help that industry stay afloat?

Could a similar subsidy have saved cinema organists, minicomputers, or the Pony Express?

That’s the kind of experiment Massachusetts is embarking upon, with a new fee on so-called transportation network companies, or TNCs, such as Uber, Lyft, and Fasten.

When Governor Charlie Baker signed a law earlier this month regulating TNCs, it included a little-discussed component. For every trip, the TNCs will have to contribute a nickel to a new fund to support modernization, training, and improvement of the taxi and livery industry. The 5-cent fee will stay in effect until the final day of 2021.

A nickel doesn’t sound like much, until you learn that the top two TNCs, Uber and Lyft, are currently facilitating more than 2,500,000 rides a month in Massachusetts. (Fasten, a TNC based in Boston, wouldn’t release numbers.)

According to a back-of-the-envelope estimate that assumes a 25 percent annual growth rate among all of the three services — with a rough guess of 100,000 rides a month as a base for Fasten — the nickel fee could add up to about $15 million before it is phased out. (My numbers also assume no newer TNC players will enter the market in Massachusetts, which certainly could happen.)

My question: why did they stop at a nickel? Why not a dollar? Or $5? Fifteen million dollars doesn't really seem like much for a slush fund. 

Eight New Permits; Hess Reports A Nice Well -- August 19, 2016

Active rigs:

	8/19/2016	08/19/2015	08/19/2014	08/19/2013	08/19/2012
Active Rigs	32	74	192	183	199

Eight new permits:

• Operators: Oasis (7), Whiting
• Fields: Banks (McKenzie), Siverston (McKenzie), Sanish (Mountrail)
• Comments:

Three permits renewed:

• EOG (2): two Austin permits, both in Mountrail County
• Whiting: a Iver & Minne permit in Stark County

CLR canceled a SIMCO permit in Divide County

One producing well completed:

• 30422, 1,279, Hess, HA-Sanford-152-96-1819H-7, Westberg, t8/16; cum --

Black Friday For VW; Black Friday For Saudi; US Schools Italy In Women's Water Polo -- August 19, 2016

Olympic women's water polo: For the gold, USA gives Italy a clinic in water polo. Led by 11 - 4 early in 4th period. Game ends with USA winning, 12 - 5. Early in the fourth, both teams pretty much played with the outcome known.

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Not Going Well For Saudi Arabia?

US ends support for Saudi in war against Yemen rebels? -- Reuters. It appears the decision to withdraw was made by President Obama based on reasons cited for the withdrawal.

The U.S. military has withdrawn from Saudi Arabia its personnel who were coordinating with the Saudi-led air campaign in Yemen, and sharply reduced the number of staff elsewhere who were assisting in that planning.

Fewer than five U.S. service people are now assigned full-time to the "Joint Combined Planning Cell," which was established last year to coordinate U.S. support, including air-to-air refueling of coalition jets and limited intelligence-sharing, Lieutenant Ian McConnaughey, a U.S. Navy spokesman in Bahrain. 

That is down from a peak of about 45 staff members who were dedicated to the effort full-time in Riyadh and elsewhere. 

The staff withdrawal, which U.S. officials say followed a lull in air strikes in Yemen earlier this year, appears to reduce Washington's day-to-day involvement in advising a campaign that has come under increasing scrutiny for causing civilian casualties.
The U.S. military personnel were withdrawn from Riyadh in June.

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VW Grinds To A Halt

 
VW production grinds to a halt.

Imagine if we saw this headline in the US: GM and Ford stop all production. That's about what this amounts to.

Bloomberg has the story.

VW stopped Passat production on Thursday and will halt assembly of its best-selling Golf on Monday if the conflict isn’t resolved.

VW has officially said the factories producing those models face slowdowns, as do plants that build chassis, the basic underpinnings of vehicles.

The supplier has essentially called the automaker a bully, prompting VW’s top labor boss to respond that he’s “furious” and the leader of its home state to say “coercive measures” by a court may be needed to end the conflict.

The production holdup threatens to reduce Volkswagen’s earnings by as much as $45 million a week at a time when the carmaker is trying to boost sagging profit at its namesake brand by lowering annual spending by 1 billion euros.

The conflict centers on a contract that VW signed with the supplier, then later canceled.

The parts maker, which builds seat and transmission parts, says it wants the auto manufacturer to pay for the plant alterations it made to provide the services.

Sounds like the supplier should have negotiated a clause in the contract that if VW....

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Blame It On The Bossa Nova

Link here.

GM's Opel to trim hours of German workers: workers at two assembly plants in Germany will be cut as auto maker faces negative effects from Brexit.

Already! The Brexit switch won't even be "turned on" this year, and it will take a couple of years to "unwind." Whatever.

General Motors Co.’s Opel unit is paring back the hours of German factory workers in a move aimed at blunting the impact of Brexit and breaking even in Europe for the first time in nearly two decades.

GM is scaling back work at two Opel assembly plants in Germany that make models popular in the U.K. Auto makers have said the U.K.’s decision to leave the European Union could result in currency headwinds and weaker British demand for light vehicles, potentially slowing momentum in Europe’s healthy auto market.

The Detroit auto maker’s European unit had been on track to end a long streak of financial losses in the region before the Brexit vote. Last month, however, GM executives have said softer vehicle sales and the negative effect of a weaker British pound could result in a $400 million hit in the second half of the year, endangering the break-even goal.

One wonders if there might not be more to the story, more to the decision-making process. But blame it on the bossa nova.


Blame It On The Bossa Nova, Eydie Gorme

A Photograph Worth A Thousand Words: How The Oil Industry Has Changed The Bakken Landscape -- August 19, 2016

There's an important story at this link for everyone, but especially for folks in Williams County.

But, in addition, I wanted to link it because it has a great aerial photo of Williams County, probably State Highway 1804 east of Williston. [Later: I've posted the photo below, in case the link breaks.]

For newbies: Williams County is one of the four major counties that make up the Bakken. Note how the oil boom has changed the landscape of North Dakota. Also note the heavy traffic.

Now, imagine if the world's largest wind farm were to be located here.

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US Politics

Biased media. Trump visits flooded-out Louisiana. President Obama dines on seafood, golfs on Martha's Vineyard. Hillary is MIA. Has event on Sunday with Cher in Provincetown, Cape Cod, and in Atlanta, GA, later that day. No one in mainstream media calls out POTUS or Hillary. It will be interesting if ABC's David Muir covers Trump's visit to Louisiana. I bet not.

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From Story Above

Idle Comments Not Ready For Prime Time -- August 19, 2016

Did Yahoo!Finance just change their "front page"? They have received a lot of criticism for their "new look." For the record, I hate Yahoo!Finance's new look and hope they return to their "old look."

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It's been about two years since the oil sell-off began. One can see the EIA graph here.

I guess in round numbers, we hit a low of about $25 in February, 2016, after plummeting from a trading range of $90 - $110 for several years.

Oil at $25 takes us back to the years -- if you can believe this -- 1986 - 2002.

In the past two years, untold billions of dollars in CAPEX have been cut as deep-sea projects have been deferred or canceled outright. "OPEC" production has been producing at max rates, and Norway is reporting that they are now setting production records.

There are two schools of thought going forward:

• some say there is no way US shale oil can possibly make up for all the deferred / canceled deep-sea and conventional projects
• others say US shale oil can make up for loss of conventional plays

Most agree that we will find out one way or another, which argument was correct, in 2017, at the earliest, or maybe 2018, at the latest.

My hunch is we will find out in 2018 when the real data starts rolling in, but the market will "telegraph" the answer by mid- or late-2017.

So, expect rocky/volatile/scary WTI pricing between now and March, 2017.

July, 2017: the market will telegraph where oil will be trading in 2018

2018: we will see which argument won out.

For me, it's a win-win for Big Oil and for investors in Big Oil. If the deferred/canceled projects do not cause a problem, then Big Oil saved themselves from a huge disaster by bringing on even more projects. If the deferred/canceled projects result in a "relative shortage" of oil, the price of oil actually produced will be significantly higher.

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Farther out, one can confidently say that by 2022, and possibly as early as 2020, we are going to start seeing stories of "Peak Oil" again. I wouldn't be surprised if the "Peak Oil Blog" didn't re-appear after being shut down some years ago coincident with the Bakken Boom.

No one will argue that Saudi Arabia will be a failed nation by 2022 if the price of oil remains under $60 between now and then. If oil stays under $50 for another couple of years, Saudi's entire cash reserves will be gone -- or shored up by debt. [Of course, no one expects oil to remain under $50 for two more years but even $60 oil is not particularly helpful for Saudi. They need a lot more.]

Saudi needs cash:

• to support huge social program internally; pay for desalination; huge nuclear reactor program (just to make enough electricity for their own country)
• to fend off Yemeni ankle-biters, costing them millions
• to fend of Iran (remember, at one time the Mideast was all about Iraq vs Iran, with Saudi on the sidelines simply producing oil; no more; it's now all about Saudi vs Iran, with Iraq rising)

If Saudi is able to navigate successfully the next four years, they will only do so by getting oil back to at least $80/bbl, and even that, seems unlikely to be adequate.

If on the other hand, Saudi fails to get oil back to $80, one wonders if they can even manage their current production levels. It may be "relatively" inexpensive to produce Saudi oil, but it still requires a lot of cash.

As with the CAPEX issue above, the Saudi story is a win-win for oil bulls: either way, we are going to see oil well above $80 by 2022, if not sooner.

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A Shout-Out To Harold Hamm

One really has to hand it to Harold Hamm. It was only a couple of years ago, during the height of the Bakken Boom, Hamm was talking about a "stealth" play in Oklahoma -- I forget now whether it was SCOOP, STACK, or both. At the time, I thought it was a bit of Hamm hyperbole. I was really, really wrong.

Like the Oklahoma land rush of 1889, "everyone" is rushing to Oklahoma. There are two amazing stories here. First, Hamm called it again, and he called it early. And second, he called it during the Bakken Boom when it would have been easier to drill out the Bakken than take on new risks. He was thinking like the Big Oil companies: concerned about new production in the out years.

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Speaking Of CAPEX

From 24/7 Wall Street:

America’s two supermajor energy producers, Exxon Mobil Corp. and Chevron Corp., are joining forces with Hess Corp. to bid as a group for rights to drill in Mexico’s deepwater offshore fields.

The auction is currently set for December 5 and includes 10 offshore regions.

Since removing a nearly eight-decade ban on non-Mexican exploration and production companies, Mexico has held three auctions and achieved only modest success.

The first, in July 2015, resulted in just two of 14 shallow-water blocks being taken. A second auction last October resulted in three of five shallow-water offshore contracts being awarded, and the third, with bidders competing for onshore assets, drummed up 25 bids for 25 fields, most from small Mexican firms.

Some data points:

• December deepwater auction: $44 billion expected from 26 companies; first-ever sale of deep-water rights
• later this year, or early 2017: Mexico is planning to auction rights to onshore shale oil fields; previously it was a bust; bad timing
• onshore shale oil: 
• 60 billion bbls; 50% oil (Pemex estimate)
• 104 billion bbls; of which 13 billion bbls are oil (EIA estimate) 

Reminder to newbies:

• Bakken: 50 billion bbls recoverable; 93% oil

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NOTE: in all my posts I often mix facts and opinions, and I don't often differentiate or spell out which is which. I am inappropriately exuberant about the US economy, the Bakken, and the oil and gas industry. Do not make any investment, financial, job, relationship, or travel decisions based on what you read here or think you may have read here. 

I often round numbers and generally do not say when numbers have been rounded. I often make simple arithmetic errors. There are a lot of typographical and factual errors which I try to catch later and correct. I ask readers not to tell me of typographical errors unless they materially affect my agenda.

I do have an agenda: to better understand the Bakken and to place the Bakken Boom in context with current events, to include a few selected non-energy issues. 

Deere Beats! Shares Jump 13%; The Ethane Story Simply Won't Quit -- RBN Energy -- August 19, 2016

Unemployment rate rises in seven states, as reported at The Hill. The questions:

a) whether the states are "swing states"
b) whether the states "matter"
c) whether there are any "surprises"
d) whether the increases are even "significant"
e) whether they are related to "energy"
f) a "blue" state

So, let's see. Here are the seven states reporting a rise in unemployment:

• Iowa (f; b, maybe)
• Kansas
• Maine (f)
• Missouri 
• New Mexico (f)
• Oregon (f)
• South Dakota - has the lowest unemployment at 2.8%.

Other data points:

• not one "energy" state was on the list, although Alaska was noted to have the highest unemployment rate at 6.7%.
• North Dakota was mentioned with an unemploment rate of 3.1%, much lower than the national average.
• California added 374,000 jobs over the last year, but its 5.5% unemployment rate still remains higher than the national average of 4.9%.
• finally, since October, 2009, when the US unemployment rate peaked at 10%:
• California has added 800,000 jobs
• Texas has added the most jobs of any state: 1.2 million jobs
• Florida has added 625,000 jobs

 

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Active rigs:

	8/19/2016	08/19/2015	08/19/2014	08/19/2013	08/19/2012
Active Rigs	33	74	192	183	199

RBN Energy: US ethane squeezing out Canadian propane/butane in Sarnia.

The availability of vast amounts of ethane from the nearby “wet” Marcellus and Utica plays is spurring a petrochemical rejuvenation in Sarnia, ON. Two years ago NOVA Chemicals stopped using naphtha as a feedstock at its 1.8 million pound/year ethylene plant in Sarnia’s Chemical Valley and now relies on a combination of ethane, propane and butane. Next year the company is planning to complete the plant’s conversion to 100% ethane and is considering the possibility of building a big polyethylene plant nearby. Today, we continue our comprehensive review of southwestern Ontario’s NGL, petchem and refining infrastructure, including Sarnia’s NGL fractionation, storage and end-use markets.  

Sarnia has been a major player in crude oil, refining and petrochemicals for well over a century. An 1858 oil well in nearby Oil Springs, ON is said to have been the first on the continent, and over time, oil-production, refining and petchem infrastructure was developed in southwestern Ontario (as were pipelines and railroads). Sarnia’s role as a major refining/petchem player continues to this day, decades after most oil production in southwestern Ontario dried up.

Previously we looked at the crude oil side of things, describing the three refineries in Chemical Valley, the oil pipelines that supply them, and the petroleum-products pipelines that help move the refineries’ output to market. In today’s episode, we turn to Sarnia’s important NGL sector: the pipelines that transport purity ethane and mixed propane/butane to Chemical Valley, the fractionator that separates mixed NGLs into purity products, the NGL storage facilities, and the big ethylene plant that “cracks” ethane, propane and butane into ethylene –– a critically important petchem building block.

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The Market

Closing:  down 45 points at the end of the day. NYSE:

• new highs: 115, add, CLR (a big whoop); HAL; ONEOK.
• new lows: 9

Mid-day: not much change, though the market has recovered significantly from the open; now down only 34 points. NYSE:

• new highs: 82, included Edwards Lifesciences (a huge whoop); Encana; Pioneer Natural Resources (has been on a huge roll this past week); WPX; XLNX (not on the NYSE)
• new lows: 9

Opening: down 100 points; Fed rate increase back on the table. Yawn. Buying opportunity.

I completely missed this yesterday: Edwards Heart valve wins expanded FDA approval; stock hits record close.

Wow: Deere beats 3Q16 earnings expectations! Shares jump 13%. 

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WSJ Headlines

Lyin' Ryan: Lochte's teammates, USOC "discredit" robbery story.
Comey's FBI double standard, an op-ed. Great role model. Not.
President used "leverage" -- not a ransom -- to obtain prisoner release. Leverage, contingent, but not a ransom.
Russia builds up army near Ukraine border: October surprise?

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Speaking of Double Standard

Like Father, Like Daughter

Do you remember that "leaked" video of Malia Obama toking? It turns out that she was alerted, and "removed" from the party moments before the party was raided by cops. Double standard?  

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Good Intentions. Good Outcome?

This is a big, big story. It will gain traction as we go into 2017: watch out retirement savers. Your choices are poised to shrink. This is the "ObamaCare" equivalent for the mutual fund industry. The comments help put the story into perspective.

Brokerage Edward Jones, anticipating the fiduciary rule that will require brokers to put the interests of retirement savers ahead of their own, said on Wednesday that it would stop offering mutual funds and exchange-traded funds in retirement accounts that charge investors a commission. The move makes the St. Louis firm the first big player to disclose detailed plans on retirement accounts that charge a commission.

Retirement savers could be forced to make decisions in the months ahead as other firms determine how they plan to operate under the Obama administration’s new rule, which starts to take effect in April. The rule doesn’t extend to nonretirement accounts.
Among the requirements in the rule, brokers have to justify the varying compensation they can receive for recommending one investment product over another to a retirement saver. Brokers said that rule makes sales fees on some mutual funds, known as sales loads, and some funds’ differing share-class prices problematic for accounts that charge investors for each transaction made.

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Movies

Updates

August 20, 2016: in the original post I noted that I wouldn't even think of going to Ben-Hur; Morgan Freeman's hair-do was not one of his best choices. Well, the numbers are in, and .... "Ben-Hur bombs -- Hollywood Deadline:

With an estimated production cost that’s in the vicinity of $100M, MGM and Paramount certainly didn’t build Ben-Hur to fail this weekend.

But if there’s one Come-to-Jesus from this remake’s estimated disastrous $11M opening: It’s still a challenge for Hollywood to cross over a faith-based film to the masses 12 years after the $370M ($612M global) success of Mel Gibson’s The Passion of the Christ.

Original Post

 

Apparently Woody Allen's Cafe Society" opened to very limited release and due to family conflicts we did not make any of the showings -- in the local area, the movie was showing at only one theater for three days. Now we will wait until wide opening.

However, The WSJ has a great review of Hell or High Water. Sounds like a nice alternative sometime this weekend.

Ben-Hur: we saw the trailer. It's a laugher. Wouldn't even think about going. Morgan Freeman's hair-do probably not one of his best choices.

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The Apple Page

Apple will drop "Store" from "Apple Store." It's no longer the Apple Store in Southlake, it's "Apple Southlake." "Apple Fifth Avenue" sounds great, but some names just don't work, like "Apple The Grove" -- the Apple store at the Grove in west Los Angeles.

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For The Granddaughters

The Olfactory Page
Why Dogs Sniff

From the NIH.gov:

Olfactory receptors (ORs), the first dedicated molecules with which odorants physically interact to arouse an olfactory sensation, constitute the largest gene family in vertebrates, including around 900 genes in human and 1,500 in the mouse. Whereas dogs, like many other mammals, have a much keener olfactory potential than humans, only 21 canine OR genes have been described to date.

In this study, 817 novel canine OR sequences were identified, and 640 have been characterized. Of the 661 characterized OR sequences, representing half of the canine repertoire, 18% are predicted to be pseudogenes, compared with 63% in human and 20% in mouse. Phylogenetic analysis of 403 canine OR sequences identified 51 families, and radiation-hybrid mapping of 562 showed that they are distributed on 24 dog chromosomes, in 37 distinct regions.

Most of these regions constitute clusters of 2 to 124 closely linked genes. The two largest clusters (124 and 109 OR genes) are located on canine chromosomes 18 and 21. They are orthologous to human clusters located on human chromosomes 11q11-q13 and HSA11p15, containing 174 and 115 ORs respectively.

This study shows a strongly conserved genomic distribution of OR genes between dog and human, suggesting that OR genes evolved from a common mammalian ancestral repertoire by successive duplications.

In addition, the dog repertoire appears to have expanded relative to that of humans, leading to the emergence of specific canine OR genes. Olfactory receptor (OR) genes were first discovered in Rattus norvegicus in 1991 by Buck and Axel. They belong to the G-protein-coupled receptor superfamily, which is characterized by seven hydrophobic transmembrane domains.

In mammalian genomes as many as 1,000 OR-encoding genes are predicted, comprising 3-5% of the total gene content. The OR repertoire thus forms the largest known gene superfamily, also known as the olfactory subgenome.

Each OR gene consists of a single coding exon of about 1 kilobase (kb). Conserved regions that encode transmembrane domains 3 (TM3) and 7 (TM7) have been used to design degenerate oligonucleotides that are specific for the OR gene superfamily. Using such primers, a number of OR gene sequences have been cloned from several other mammalian species such as human, mouse, dog (Canis familiaris) and pig, as well as fishes and amphibians.

The consensus sequence in Drosophila melanogaster is distinct, and the coding region can be split by introns. This is also the case in Caenorhabditis elegans, in which some 600 chemoreceptor sequences have been found by systematic searches of the complete genome sequence.

Key words (phrases) for the granddaughters:

• HSA
• introns
• pseudogenes

Three observations/findings jump out:

• in mammalian genomes as many as 1,000 OR-encoding genes are predicted, comprising 3-5% of the total gene content. The OR repertoire thus forms the largest known gene superfamily, also known as the olfactory subgenome
• this study shows a strongly conserved genomic distribution of OR genes between dog and human, suggesting that OR genes evolved from a common mammalian ancestral repertoire by successive duplications
• the dog repertoire appears to have expanded relative to that of humans, leading to the emergence of specific canine OR genes
• of the 661 characterized OR sequences, representing half of the canine repertoire, 18% are predicted to be pseudogenes, compared with 63% in human and 20% in mouse