$240 Million Soybean Plant Near Jamestown? First Of Its Kind? Minnesota Will Build? Market And Energy Page, T+19 -- February 8, 2017

The market: Dow 30 down a bit today; NASDAQ higher today, hitting a 20th record high close since Donald Trump elected presidenty.

Biggest story of the week? This may be something to watch -- huge implication for US shale. From Reuters via Rigzone:

BP is looking at ways to incrementally increase its footprint in U.S. shale oil and gas production, its Chief Executive Officer Bob Dudley said on Tuesday.

Bakken economy: multi-million dollar soybean processing plant announced for Spiritwood, ND

• note: Spiritwood, ND, near Jamestown, ND, is in eastern North Dakota; nowhere near the geographical Bakken

• Minnesota Soybean Processors; a membership cooperative with another operation in Brewster, MN
• $240 million soybean processing plant; Spiritwood Energy Park; 150 acres
• first of its kind in North Dakota
• first question: why is this being built in ND and not in Minnesota? transportation costs are a wash; processed soybeans will need to be transported to Minnesota and points east (if question is too difficult, scroll to bottom of this page)
• 125,000 bushels of soybeans / day
• the NDSP facility would produce 900,000 tons of soybean meal annually
• don't you just hate it when writers mix units (bushels vs tons, for example -- yes, I know the reason)
• everything you need to know about soybeans
• crushing soybeans yields about 11lbs of oil and 44lbs meal per bushel of soybeans, these yields can vary slightly, but most use these values in the price analysis that will follow. 
• 900,000 tons / 365 = 2,500 tons daily = 5 million pounds daily / 60 (pounds/bushel) = 80,000 bushels daily (compare to capacity of plant)

Weekly crude oil stocks up higher again this week; 14-million-bbl build. An incredible story. Is this a "Saturday Night Live" sketch?

Iran, Qatar: crude oil production cuts will need to be extended. From Bloomberg:

• Iran: in principle, OPEC needs to pare output in second half; remember, the current agreement comes to an end mid-year
• Qatar: producers' compliance with supply cuts has been good
• the graph at this post tells me all I need to know

BP raises its break-even price to $60. Over at Rigzone:

• some of this was previously posted 
• earnings fell for second consecutive year
• now requires increased spending going forward -- leads to high break-even price 
• annual underlying replacement cost -- it's definition of net profit -- slumped to its lowest level in at least a decade, to $2.59 billion
• "having to pay for what they bought and they are the only company that actually raised their breakeven number

DAPL clean-up: Clean-up in Standing Rock Reservation: dead bodies?

• 250 truck loads
• 23 truck loads in the first week
• if pace is not picked up, huge environmental disaster with the spring floods
• officials seriously concerned about finding dead bodies (hypothermia)
• frozen mess complicates clean-up efforts 
• this effort all begin to protect the pristine nature of the waterway and surrounding prairie

More on that CLR well with huge jump in production after being shut-in.

US government to issue DAPL easement? Court injunction to follow? If so, from federal judge in Washington State.

WTI trending toward $51.

Equity market up in pre-market trading. That was earlier. Now I see that futures are down slightly.

Copy of letter directing easement to be issued at this link.

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Flashback: Minnesota vs North Dakota

Link here.

Original Post

January 21, 2011

President Obama will focus on jobs this year, he says, as the 2012 election approaches.

He might want to talk to Senator Al Franken (D) from Minnesota to find out what's happening out in the trenches.

For one thing, a very well-respected company and, should we say, an icon of Minnesota has recently expanded, building three new plants on the North Dakota side of the border.

Warroad-based Marvin Windows and Doors has opened North Dakota plants in Fargo, West Fargo and Grafton.

Marvin’s John Kirchner explained why the firm expanded to North Dakota in the last several years: “The regulatory and tax climate in North Dakota ... tend to be more friendly toward the business."

Also, Kirchner said, it takes too long to get state permits, delaying expansion plans.

While pledging that “we are not going to walk away from Minnesota” and saying Warroad will remain Marvin’s home and biggest factory, North Dakota is a good location for company manufacturing plants, he said. 

Wow, wow, and wow.

• Regulatory climate.
• Tax climate.
• Too long to get state permits.

Wow, wow, and wow.

If I didn't know better, that sounds like Washington and the federal government.

If President Obama wants to keep jobs in the US from moving overseas he should note that it is not just the corporate taxes everyone seems to talk about.  And it's not just just the regulatory climate. But it's also the phenomenal delay to get anything done, generally due to a) bureaucratic inefficiencies; and, b) legal delays on minor or technical issues.

How long can it take? Well, just to get the environmental impact statement completed can take five years. Not five months, not even a year. But five years.