Tuesday, January 24, 2017
Donald J Trump Infrastructure Priority List -- January 24, 2017
I assume President Obama shared similar information with the American public when he was president but I honestly don't recall. All I remember early in his presidency was the "beer summit" (beer and peanuts) and the Trayvon Martin story. Seriously. And, then, of course, one of the biggest tax bills in the history of the United States which was famously supported by Nancy Pelosi who said we won't know what's in it until it's passed. And then it was too late. Whatever.
But here we have it: the Donald J. Trump Infrastructure Priority List (DJTIPL).
The first thing we need to do is see if there are any
That said, some data points from the DJTIPL:
Just in: President Trump bans EPA employees from giving "social media" updates and bans employees from talking to the press.
I remember years ago when "Hardball with Chris Matthews" debuted on some cable network. I vaguely remember watching one or two "shows" but do not remember my reaction one way or the other. All I remember is I never watched it after that.
Occasionally, I come across "Hardball with Chris Matthews" as I surf through the "channels" to get to where I want to go. I pause for a minute or so, and still have the same reaction: if this is "hardball" I've forgotten the definition of the word. We had more intense discussions in college.
Likewise, Bill O'Reilly's "the spin stops here." Hardly. The "spin" goes on and on with Bill. I don't / won't watch him either.
After the election I watched MSNBC "Morning Joe" for about one week; no longer watch it. I tune in to CNBC "Squawk Box" less and less but tend to watch a fair amount of CNBC now that Trump is getting very, very active in the morning, and to watch the Dow 30 move toward 20,000. Speaking of which: we were incredibly lucky that the market did not hit 20,000 under President Obama. He would have taken credit for it, when it was obviously the Trump rally. So, we'll see.
But here we have it: the Donald J. Trump Infrastructure Priority List (DJTIPL).
The first thing we need to do is see if there are any
- obvious conflicts-of-interest;
- probable conflicts-of-interest;
- possible conflicts-of-interest;
- no obvious conflicts-of-interest now but possibly, maybe sometime in the future;
- no conflicts-of-interest whatsoever but within 750 miles of a Trump-named golf course which could be considered a conflict-of-interest byThe Washington Post
That said, some data points from the DJTIPL:
- 50 infrastructure projects
- nationwide
- totaling at least $137.5 billion
- possible projects:
- a new terminal for the Kansas City airport
- upgrades to I-95 in North Carolina
- construction of a high-speed railway from Dallas to Houston: $18 billion; would be built by a Japanese company could transform transportation in the Lone Star State
- funding via public-private partnership
- very, very similar to the "Governors List" circulated in December, 2016
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Playing Hardball
Just in: President Trump bans EPA employees from giving "social media" updates and bans employees from talking to the press.
I remember years ago when "Hardball with Chris Matthews" debuted on some cable network. I vaguely remember watching one or two "shows" but do not remember my reaction one way or the other. All I remember is I never watched it after that.
Occasionally, I come across "Hardball with Chris Matthews" as I surf through the "channels" to get to where I want to go. I pause for a minute or so, and still have the same reaction: if this is "hardball" I've forgotten the definition of the word. We had more intense discussions in college.
Likewise, Bill O'Reilly's "the spin stops here." Hardly. The "spin" goes on and on with Bill. I don't / won't watch him either.
After the election I watched MSNBC "Morning Joe" for about one week; no longer watch it. I tune in to CNBC "Squawk Box" less and less but tend to watch a fair amount of CNBC now that Trump is getting very, very active in the morning, and to watch the Dow 30 move toward 20,000. Speaking of which: we were incredibly lucky that the market did not hit 20,000 under President Obama. He would have taken credit for it, when it was obviously the Trump rally. So, we'll see.
Whiting To Report A Nice P Bibler Completed DUC Thursday -- January 24, 2017
Active rigs:
Wells coming off confidential list Wednesday:
31686, see above, Whiting, P Bibler 154-99-3-5-8-14H, Stockyard Creek:
| 1/24/2017 | 01/24/2016 | 01/24/2015 | 01/24/2014 | 01/24/2013 | |
|---|---|---|---|---|---|
| Active Rigs | 38 | 47 | 157 | 186 | 188 |
Wells coming off confidential list Wednesday:
- 31686, 1,957, Whiting, P Bibler 154-99-3-5-8-14H, Stockyard Creek, 40 stages, 10.6 million lbs, Whiting's P Bibler wells are tracked here, t8/16; cum 99K 11/16;
- 32727, conf, Crescent Point Energy, CPEUSC Suitor 3-13-24-158N-101W, Little Muddy, no production data,
- Operator: Whiting
- Field: Truax (Williams)
- Comments: four new Scanlan permits; all on same pad, Lot 4-5-153N-98W, 460 FNL; 545' FWL
- HRC (13): thirteen Fort Berthold permits, all Dunn County; two of the permits NWNE 27-148-95; six permits in NENE 26-151-94; five permits in NWNW 13-148-95
- Whiting (2): a Kaldahl permit and a G Bergstrom permit, both in Williams County
- Lime Rock (2); two Veverka permis, Dunn County
- 30699, 419, Statoil, Hospital 31-36 8TFH, Alger, t12/16; cum --
- 30971, 1,042, BR, Gudmunson 3-1-26MBH, Elidah, t12/16; cum --
- 31587, 1,530, Statoil, Ruth 28-33 7H, East Fork, t12/16; cum --
- 31588, 1,110, Statoil, Jack 21-16 6H, East Fork, t12/16; cum --
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31686, see above, Whiting, P Bibler 154-99-3-5-8-14H, Stockyard Creek:
| Date | Oil Runs | MCF Sold |
|---|---|---|
| 11-2016 | 14039 | 20722 |
| 10-2016 | 22039 | 32678 |
| 9-2016 | 29313 | 40556 |
| 8-2016 | 27161 | 34189 |
| 7-2016 | 5961 | 9856 |
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Location Of The Six HRC Renewed Permits
- 22707, 1,959, HRC, Fort Berthold 151-94-26B-35-3H, Antelope, Sanish pool, 30 stages, 4.5 million lbs, t4/14; cum 403K 11/16;
- 22708, 1,776, HRC, Fort Berthold 151-94-26B-5-2H, Antelope, Sanish pool 31 stages, 4.7 million lbs, t4/14; cum 260K 111/6;
- 20328, 1,647, HRC, Fort Berthold 151-94-26B-35-1H, Antelope, Sanish pool, 26 stages, 2.7 million lbs, t3/12; cum 488K 11/16;
President Trump Continues To Ride That Wave -- January 24, 2017
NASDAQ composite just hit a new high: 12:08 p.m. Central Time, January 24, 2017. Later in the day, the S&P 500 also his an all-time high. The Dow 30 did not. The S&P 500 is a better representative of the overall market than the Dow 30.
The Market
After almost a week of consecutive declines in the market, albeit minor declines, the market is up 103 points shortly after Trump meets with auto manufacturers and signs five pro-business EOs. This does not feel like a "dead-cat" bounce.
Interestingly, oil is solidly above $50 and trending higher -- and it started its move before Trump's second business day in office.
I will still argue that President Trump has caught a wave, and is riding it. Although today, one could say he is "making a wave."
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Target: E-Commerce -- Really, Really Bad News For Retailers
Jim Cramer got this exactly right. Cramer mentioned two reasons, but the headline / story focused on only one reason why e-commerce is bad for retailers (other than Amazon). See if you can spot both reasons.
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Trump, Autos, and Border Adjustment Taxes
This was a note to a reader on this subject. This is not ready for Prime Time, and needs a lot of work, a lot of editing, but I want to get it out there, so it's not lost:
The small-car-imports-from-Mexico is quickly turning into a non-story, but could
certainly produce some interesting unintended consequences:
- oil is plentiful / gasoline is cheap -- and consumers think that will last for years
- Americans are buying larger vehicles, SUVs, pickups
- apparently the margins on these small cars (regardless of where they are made) are very, very narrow
- before it's all over, one of two things will occur: auto makers will be given waivers / offsets to be allowed to bring in small cars if they offset with large-vehicle plants in the US; or, some auto manufacturers will simply quit selling small vehicles
- the only downside for an auto manufacturer to quit selling small autos in the US, I think, is this: the small autos bring a segment of the buying public into the show room; some of these small cars are "entry-level" cars for consumers that could become customers down the road for larger vehicles
But
with better CAFE mileage, cheap gasoline, and good financing, it's very
possible Americans will move into higher-end, higher-margin cars sooner
than later if they don't have the cheap, small car option to begin
with.
In other words: might the American public buy up if smaller cars were not available in the first place?
Not ready for Prime Time. This was a note I sent to a reader regarding tariffs and taxes.
I don't know if President Obama set the record for the number of executive orders he signed, but it was my impression that he signed most of his executive orders:
[Later, 1:12 p.m. Central Time: the number of executive orders signed by President Obama did not come close to setting any record. See wiki. Presidents in recent history have signed 400 executive orders, plus or minus; FDR signed around 3,500 executive orders.]
In other words: might the American public buy up if smaller cars were not available in the first place?
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Tariffs Vs Taxes
Not ready for Prime Time. This was a note I sent to a reader regarding tariffs and taxes.
I don't know if you recall that the Supreme Court ruling on ObamaCare's constitutionality -- Chief Justice Roberts ruled that ObamaCare was a TAX and therefore it was constitutionally legal.By they way, I now see that if "negotiations don't work out," Mexico may walk away from NAFTA. Looks like Mexico is going to make this easy for President Trump.
I don't know if you heard Ryan this morning, at his press conference just after Trump met with auto manufacturers. Ryan was asked about tariffs.
Ryan was very, very clear to point out the difference between tariffs and border-adjustment taxes.
The president has authority to invoke tariffs, but Ryan says these are not tariffs.
Rather, these are taxes.
This is important. If Trump tried to impose tariffs, they might be brought into court. But by calling these "auto tariffs" TAXES -- Ryan has learned from Obama -- tax policy initiated in Congress and signed by the President is not an issue for the Supreme Court.
Again, another note I sent to a reader. This note is not ready for PRIME TIME. It, too, needs to be cleaned up, edited, but I will leave that to my editor.
A small point: if these are not tariffs, all that talk about a "trade war" is pretty much moot.
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The Visual
I don't know if President Obama set the record for the number of executive orders he signed, but it was my impression that he signed most of his executive orders:
- without any announcement;
- without transparency (not on television);
- in the middle of the night, or after the end of the news cycle at the end of the week, just before he headed out to golf
[Later, 1:12 p.m. Central Time: the number of executive orders signed by President Obama did not come close to setting any record. See wiki. Presidents in recent history have signed 400 executive orders, plus or minus; FDR signed around 3,500 executive orders.]
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The Political Page
The flurry of activity -- meaningful, positive, making American greater than ever before -- is something I have never, never seen in 30 years of following politics. This president is laser-focused on a subject Americans can understand: jobs.
Jobs.
I'm sure we all have our own memories of the start of President Obama's presidency but the only thing I recall is the "beer summit" and Trayvon Martin. I had forgotten when they occurred.
Trayvon Martin was shot and killed February 26, 2009, almost within the first month of Obama's inauguration. That seemed to pre-occupy the president and the press until the next major event in the early Obama presidency, what came to be called the "beer summit" that occurred in July, 2009.
From The Washington Post:
The beer summit yielded fuzzy photographs of the four men drinking and eating peanuts. But the lasting impression was that the president had stepped into a divisive racial debate for which he was unprepared.From ABC News:
At a news conference July 22, Obama inflamed the discussion when he said the Cambridge police "acted stupidly" when they arrested Gates. Two days later, Obama told reporters he wished he had "calibrated" his words differently and did not mean to malign the police. Obama said he believed Gates and Crowley had "overreacted" to events.One can argue that that "comment" led directly to #BlackLivesMatter. I think historians will make the connection.
Whatever political capital President Obama still had after those two events, was wasted -- and everyone agrees on this, including his own party -- was wasted on solving the health care problem. Absolutely nothing else got done.
Yes, yes, I know the economy / market was in free-fall, and there was talk of the entire US economy at risk of implosion. But, I don't viscerally remember that. I viscerally remember the "beer summit"; the president maligning the police response to a man reported to breaking into a house; and, the president stepping into the Trayvon Trevor case with some amazing comments.
President Trump's tweets not only do not compare, but already we are seeing a change in tone of these tweets as he transitions from candidate to president. It's an interesting phenomenon to watch: a businessman with no prior political experiencing transitioning into the President of the US.
Meandering Thoughts On Crude Oil Rebalancing -- January 24, 2017
We will start with this:
Yesterday, I happened to get into a discussion with a reader who thought global demand for crude oil could overtake supply of crude would occur sooner than later.
Over at this post, I opined:
I tend not to get into back-and-forth discussions on the blog, simply moving forward with new stories as they get released.
I thought that the supply/demand discussion we had yesterday was over and we would move on to something else today.
Then out of the blue, via Twitter from Oil & Gas Journal: an update on the Thunder Horse South expansion project.
But before going in to that, get yourself up to date by checking out the wiki site on Thunder Horse.
But note: the wiki site on the Thunder Horse is really, really slanted (sad to see on wiki) and has not been updated.
For more on Thunder Horse, then, check out these articles:
BP analysis, 2015: world oil production growth in 2015 significantly exceeded growth in oil consumption for a second consecutive year:
There are many, many articles suggesting crude oil supply will fall behind crude oil supply and that it will happen sooner than later. This from The Wall Street Journal, August 11, 2016.
It should be noted that this article was written before the Thunder Horse South expansion progroject was brought on-line 11 months early and $150 million under budget.
We will come back to this graph in a stand-alone post. It's been posted previously:
The graph does not exist, but in your mind, imagine this graphic: overlaying the "US tight oil forecast" graphic above with a current Gulf of Mexico crude oil graph.
From Bloomberg:
But when I look at the Bloomberg article above, I see cuts of less than 2 million bopd, and that comes after record production going into 2017. But let's say OPEC was even able to cut 3 million bopd. Let's say they even cut an unbelievable 5 million bopd.
Put that figure, 3 million bopd cut, or even 5 million bopd, in your mind.
Now go back and look at these three graphs or data points:
Two last thoughts:
Yesterday, I happened to get into a discussion with a reader who thought global demand for crude oil could overtake supply of crude would occur sooner than later.
Over at this post, I opined:
What I get from [the HAL 4Q16 earnings conference call]: no one is even thinking about decisions to go back to deepwater until late 2017, and reading between the lines, it sounds like even then (late 2017) there will be no one making decisions. So that puts us well into 2018, maybe later, where the majors say, "Hey, let's look at deepwater."
At best, 2018, they "pull the trigger" -- agree to go back to deepwater. It would be slowly; not a lot of activity. A year to gin up, that puts us into 2019. Depending on the approval process, etc., we are well into 2020 I think before we start seeing return to deepwater and it would not be a boom by any stretch.
We're at $50 oil; the comments above said "how much further commodity prices have to go to bring some of these .... highly complicated ... or longer duration projects to the front of the queue...."
The reader's argument was that the combination of OPEC cuts and delay of major deepwater projects since 2014 could result in supply/demand imbalance sooner than later. I suggested that we won't see that until 2020 until the earliest. The reader thought is would occur sooner."$50 oil is WTI/ Brent is about $53. "...how much further..." he didn't say but it certainly suggests well above high 60's and probably in to the $70s. It will be interesting to watch (from other sources) what folks think the price of oil needs to get to see projects off-shore.
I tend not to get into back-and-forth discussions on the blog, simply moving forward with new stories as they get released.
I thought that the supply/demand discussion we had yesterday was over and we would move on to something else today.
Then out of the blue, via Twitter from Oil & Gas Journal: an update on the Thunder Horse South expansion project.
But before going in to that, get yourself up to date by checking out the wiki site on Thunder Horse.
But note: the wiki site on the Thunder Horse is really, really slanted (sad to see on wiki) and has not been updated.
For more on Thunder Horse, then, check out these articles:
- BP starts up water injection project at Thunder Horse, Oil & Gas Journal, May 25, 2016
- Overview, undated, but an old article -- the URL still has the original name for this project; nice article for background, Offshore Technology
- Thunder Horse: first of a generation in the GoM, Offshore, December 1, 2009,
- BP's Thunder Horse to under-perform in the wake of the Deepwater Horizon blowout, The Oil Drum, April 30, 2010
- Thunder Horse South expansion project
- came in early; under-budget
- located about 2 miles south of the existing Thunder Horse platform
- a system of collection points for wells connected to the platform by two 11,000-ft-flowlines installed on the seabed in late 2016
- this is the first new well
- tapped into the highest amount of hydrocarbon-bearing sand seen to date at Thunder Horse field; 500 feet of net pay
- 15% below budget; 11 months ahead of schedule
- will result in production increase of 50,000 boe/d gross
- elsewhere, but not in this article, this expansion project is to add 800,000 bope/d to Thunder Horse production
- From Rigzone staff, data points:
- here it is: yes, the expansion goal is to add 800,000 additional boe/d of new production by 2020
- BP: 11 months ahead of schedule; $150 million under budget
- BP: "These facts demonstrate that deepwater projects can be executed in a cost-effective way while keeping a relentless focus on safety"
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Crude Oil Production
BP analysis, 2015: world oil production growth in 2015 significantly exceeded growth in oil consumption for a second consecutive year:
Production grew by 2.8 million b/d, led by increases in the Middle East (+1.5 million b/d) and North America (+0.9 million b/d). Production in Iraq (+750,000 b/d) and Saudi Arabia (+510,000 b/d) rose to record levels, driving an increase in OPEC production of 1.6 million b/d to 38.2 million b/d, exceeding the previous record reached in 2012.
Production outside OPEC slowed from last year’s record growth but still grew by 1.3 million b/d.
The US (+1 million b/d) accounted for all of the net growth of production outside OPEC, and remained the world’s largest oil producer.
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Crude Oil Demand
There are many, many articles suggesting crude oil supply will fall behind crude oil supply and that it will happen sooner than later. This from The Wall Street Journal, August 11, 2016.
It should be noted that this article was written before the Thunder Horse South expansion progroject was brought on-line 11 months early and $150 million under budget.
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Outrunning Change -- Saudi's Existential Dilemma
We will come back to this graph in a stand-alone post. It's been posted previously:
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Gedanken Graph
The graph does not exist, but in your mind, imagine this graphic: overlaying the "US tight oil forecast" graphic above with a current Gulf of Mexico crude oil graph.
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OPEC Goal To Cut Production
From Bloomberg:
Bringing about a crude-supply deficit of 760,000 barrels a day in the first half of 2017 would require OPEC to fully implement its 1.2 million barrel-a-day cut, a goal that is challenged by rising production from exempt members Libya and Nigeria. Among non-OPEC producers, it would be crucial that Russia completely follows through on its pledge to gradually curb output by as much as 300,000 barrels a day.
Full compliance with the deal would mean OPEC crude supply in the first half is about 400,000 barrels a day lower than demand, the data show. If the 11 non-OPEC nations stick to their pledges, their combined output would be 17.97 million barrels a day over the period, almost 360,000 barrels a day lower than the IEA’s current forecast.OPEC pumped at records going into the 2017 cut. The OPEC production numbers are alloover the chart: OPEC has their official numbers; the industry relies on secondary sources for more reliable data; etc., etc.
But when I look at the Bloomberg article above, I see cuts of less than 2 million bopd, and that comes after record production going into 2017. But let's say OPEC was even able to cut 3 million bopd. Let's say they even cut an unbelievable 5 million bopd.
Put that figure, 3 million bopd cut, or even 5 million bopd, in your mind.
Now go back and look at these three graphs or data points:
- the US tight oil forecast graph above
- the recent announcement that Thunder Horse South could add 800,000 boe/d to global supply
- the Gedanken Graph
- Kashagan: finally on-line; economically can't afford to pump/transport oil at $50/bbl, but it could be capable of producing upwards of 1 million bopd; the consortium is desperate to start getting a return on its $53+ billion investment
- Bakken: unfettered could quickly grow to 2 million bopd (from 1 million bopd); one obstacle, takeaway capacity, could be coming to a head with DAPL, Trump presidency
- western Canadian oil sands: Keystone XL would make a huge difference (same link); as recently as today, CNBC talking heads said Keystone XL could "flood" US with oil (heavy oil which US refineries on Gulf Coast need
Two last thoughts:
- First: go back and look at the HAL earnings conference call.
- Second: this article from oilprice.com today
Last week the IEA warned that rising non-OPEC production could put an end to the OPEC-fueled price rally that began in late November after the cartel’s agreement to cut production. With oil production bouncing back in the shale patch and a handful of other large-scale offshore projects set to come online, global output could prove resilient despite OPEC’s best efforts. That raises the prospects of a new trading zone for crude oil, trapped within a narrow band between $50 and $60 per barrel. OPEC’s cuts of 1.2 million barrels per day, plus the non-OPEC reductions of almost 600,000 bpd, will put a floor beneath crude at $50. The cuts ensure that the market will not be excessively oversupplied going forward, perhaps blocking another potential downturn in oil prices.
On the other hand, the swift rebound in shale drilling could put a cap on prices, killing off any chance of a sustained price rally. Anytime prices try to rise beyond the $50s per barrel, more shale production will come online and push prices back down. There are plenty of signs that suggest that both of these forces are playing out. OPEC officials are striking an optimistic tone in regards to compliance with the promised cuts. Over the weekend, Saudi energy minister Khalid al-Falih said that OPEC and non-OPEC countries have already complied with 1.5 million barrels per day of cuts since November, although those figures are still preliminary. The figures that al-Falih provided to the media did not include an overall collective output figure, nor did they include rising production from Libya and Nigeria, countries exempted from the Nov. 30 deal. So they should be taken with a grain of salt.
Trump, Keystone XL, DAPL; Big Day -- Lots Of News -- January 24, 2017
Huge, huge day -- lots of news. I will simply add the links that I want to come back to later.
I will be off the net for about an hour. I am putting together a post with regard to this story that popped up over night:
Existing home sales: highest level since 2006. Link to follow if I remember.
Saudi Arabia: too many young people.
Europe: huge story on freezing smog across England, France -- all due to too-much coal burning and wood-burning. How did that renewal energy plan work out?
Pipelines: Trump executive order(s) to affect Keystone XL, DAPL.
Solar: MDU sells large Nevada community solar project. Reuters, 23 minutes ago.Buyer: Orix USA. No further details. Most likely maximized their tax credits; Trump elected president; time to move on.
Oil pricing: stuck in narrow band. Oilprice, yesterday.
HAL confirmed? Oilfield services' struggle may persist in 2017. Rigzone, yesterday.
Deepwater oil: surprise, surprise. Rigzone, yesterday. Peak oil? What peak oil?
Mideast got the message? Iraq has cut 180,000 bopd as part of OPEC oil deal; will cut further. Reuters via Rigzone, yesterday.
Active rigs:
RBN Energy: new REX Zone 3 capacity reveals the future of northeast gas markets.
I will be off the net for about an hour. I am putting together a post with regard to this story that popped up over night:
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Saudi Arabia: too many young people.
Europe: huge story on freezing smog across England, France -- all due to too-much coal burning and wood-burning. How did that renewal energy plan work out?
Pipelines: Trump executive order(s) to affect Keystone XL, DAPL.
Solar: MDU sells large Nevada community solar project. Reuters, 23 minutes ago.Buyer: Orix USA. No further details. Most likely maximized their tax credits; Trump elected president; time to move on.
Oil pricing: stuck in narrow band. Oilprice, yesterday.
HAL confirmed? Oilfield services' struggle may persist in 2017. Rigzone, yesterday.
Deepwater oil: surprise, surprise. Rigzone, yesterday. Peak oil? What peak oil?
Mideast got the message? Iraq has cut 180,000 bopd as part of OPEC oil deal; will cut further. Reuters via Rigzone, yesterday.
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Back to the Bakken
Active rigs:
| 1/24/2017 | 01/24/2016 | 01/24/2015 | 01/24/2014 | 01/24/2013 | |
|---|---|---|---|---|---|
| Active Rigs | 38 | 47 | 157 | 186 | 188 |
RBN Energy: new REX Zone 3 capacity reveals the future of northeast gas markets.