US Crude Oil Exports Hit Monthly Record -- February, 2017

From EIA:

Hess With Five New Permits; WPX Reports Completing One DUC -- July 5, 2017

Active rigs:

$45.39	7/5/2017	07/05/2016	07/05/2015	07/05/2014	07/05/2013
Active Rigs	57	31	76	191	188

Six new permits:

• Operators: Hess (5), Lime Rock Resources
• Fields: Blue Buttes (McKenzie); Dimond (Burke)
• Comments: Hess has permits for a new 5-well pad; wells will run west to east; other permitted locations in the area run / will run east to west; see below;

One producing well (DUC) reported as completed:

• 29879, 2,038, WPX, Etstatis 32-29HB, Eagle Nest, t6/17; cum --

Hess: new permit locations (see above):

Tesla Production "Slows Down" -- Yahoo Finance Video -- July 5, 2017

Updates

July 8, 2017: see comments below to see how Elon Musk plans to solve south Australia's energy problem.  https://www.macrobusiness.com.au/2017/07/telsa-wins-sa-battery-tender/.

July 8, 2017: from The Verge --

Today’s the day (July 7, 2017) for Tesla. The automaker says it expects to complete production of “SN1” (or “Serial Number one”) of the Model 3, its first electric car for the masses.

July 8, 2017: more bad news for Tesla -- this time from MarketWatch.

Overpromising by Tesla Inc. Chief Executive Elon Musk does not usually faze his die-hard fans and investors.

But that ended this week, when a trifecta of bad news began to hit the stock. Tesla shares wove in and out of bear territory Thursday, at one point during the trading day falling 20% off its record high of $383.45 reached on June 23.

It started with Musk’s update late Sunday that the number of cars Tesla delivered in the second quarter was below Wall Street’s estimates, due to a severe battery production shortage. Then Thursday, Tesla was not included in the latest “Top Safety Pick” list of the safest cars. Combined with reports of looming new electric-car rivals, including Volvo, the developments culminated in a big hit to Tesla’s market cap and the loss of its status as the most valuable U.S. auto maker. Tesla has lost about $7.18 billion in market value in the past two trading sessions.

Tesla’s July 2 surprise wasn’t the first time the company and Musk squeezed in bad news when some investors might be otherwise distracted. It also was not the first time Musk has made big promises and had to walk them back. Last year, Musk predicted production of 100,000 to possibly 200,000 Model 3 units in the second half of 2017, one of its most anticipated models ever, a number it later scaled back to producing about 5,000 a week, “at some point in 2017.”

On Sunday, Musk countered the news of the slightly lower delivery number with good news about the Model 3. Tesla said that its first certified Model 3 would be completed this week and about 30 cars would be handed over to customers at its Fremont, CA, factory on July 28.

July 7, 2017: bad news for Tesla -- Panasonic inaugurates electric vehicle battery factory in China. 

Panasonic unveiled today its latest battery manufacturing facility and first in China. The ~$400 million plant, which was first announced in 2015, will manufacture battery cells for the growing electric vehicle market in China.

The Japanese electronics giant claims that the projected annual capacity will support the production of “around 200,000 electric vehicles”. They plan to supply “hybrid, plug-in hybrid, and all-electric vehicles”, therefore, it’s not clear what the overall production will be in term of energy capacity since they can make 10 hybrid car batteries with 1 all-electric car battery pack.

When taking into account the Tesla Gigafactory in Nevada, it’s the second new production facility for electric vehicle batteries that Panasonic is launching this year.

July 6, 2017:  Munster didn't get the memo -- see below: only time will tell just how long the useful life of these new packs will be, but the replacement costs still remain anywhere from $15,734 and up. It is quite possible future battery pack replacement costs could exceed a car's value sending it to a scrap yard instead of a used car sales lot.) From Barron's:

He’s betting that Tesla has a much larger addressable market than many investors realize due to its relative affordability.

By Munster’s math, a Model 3 owner would be paying just 13% more than a Toyota Camry owner after five years, taking into account “savings from fuel, insurance maintenance, and repairs.” He thinks that expands Tesla’s addressable market to 11 million cars, which would enable the company to do for electric-vehicle adoption what Apple did for smartphone adoption.

Munster doesn't mention that by five years the new owner would be starting to look for a replacement battery.

Later, 6:26 p.m. Central Time: replacement value -- over at SeekingAlpha --

Tesla has invested all of its resources in a single direction under the leadership of Musk as CEO. Nevada is home to the single largest battery "gigafactory" in the world. Tesla will have invested in excess of $5 billion in this single plant with an equally singular pursuit, to build battery packs and later electric motors for the new Model 3, which will begin production on Friday.

No other automaker has taken this singular position, and perhaps for good reason. While prices have been improving, battery packs remain the most expensive component in BEV vehicles.

Only time will tell just how long the useful life of these new packs will be, but the replacement costs still remain anywhere from $15,734 and up. It is quite possible future battery pack replacement costs could exceed a car's value sending it to a scrap yard instead of a used car sales lot.

Later, 2:55 p.m. Central Time: 219 comments; 3,881 followers. Tesla story becoming increasingly fantastic as business model falls apart. Over at SeekingAlpha, summary:

• Tesla delivery numbers continue to tell a story of misery - the missing in-transit numbers is a story by itself;
• Model 3 narrative is even less credible - expect huge losses ahead; and,
• underutilization of manufacturing facilities and ongoing opex and capex continue to push the company toward bankruptcy.  

Original Post

 

I did not watch the video at the link.

The automaker met only the low end of its production estimates for the first half of 2017. Yahoo Finance’s Nicole Sinclair, Dan Roberts, and Myles Udland discuss why many investors don’t seem to be so concerned about supply problems.

Tesla shares are down about 6% today.

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Outlandish Milestones

Two men have outlandish plans, outlandish milestones, outlandish announcements.

One of the two has apparently met every milestone.

One can argue whether the other man has met every one of his milestones.

South Korea, Australia, Japan, China, the US appear  to be "blowing off" one of the two.

Every investor, it seems, is betting the farm that the other man will meet his milestones.

One man says he plans to deliver nuclear missiles to the US via ICBMs.

The other man makes batteries and cars. 

We'll Get Back To This Later -- This Is NOT Good News -- July 5, 2017

From the EIA -- see if you can spot the glaring omission in this EIA "tweet":

Based on EIA survey data for new, utility-scale electric generators (those with a capacity greater than one megawatt), capacity-weighted average construction costs for many generator types have fallen in recent years.

Annual changes in construction costs include the effects of differences in the geographic distribution of installed capacity between years, differences in technology types, and other changes in capital and financing costs…

The capacity-weighted cost of installing wind turbines was $1,661 per kilowatt (kW) in 2015, a 12% decrease from 2013…The cost of utility-scale solar photovoltaic generators declined 21% between 2013 and 2015, from $3,705/kW to $2,921/kW…The average cost of natural gas generators installed in 2015 was $696/kW, a 28% decline from 2013…Construction costs alone do not determine the economic attractiveness of a generation technology.

Other factors such as fuel costs (for generators that consume fuel), utilization rates, financial incentives, and state policies also affect project economics and, in turn, the kinds of power plants that are built. --- EIA

See this post. 

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Blogging Under Duress

The Energy And Market Page, T+166 -- July 5, 2017

All in: Volvo to be fully coal-powered by 2019.

Coal-powered EVs and China: one word -- dirty. Source: Bloomberg.

China has been making great strides toward electrification. Electric vehicle sales are booming: Consumers bought more than 300,000 last year, and more than 5 million are expected to be on the road by 2020. The government just announced bold plans for a wave of big new battery factories.

Encouraging as that may be, though, the move away from conventional cars and trucks won’t immediately reduce the country’s carbon emissions. On the contrary, the production and exploitation of electric vehicles in China actually produces more greenhouse gases and consumes more overall energy. In the short run, China’s moves could make greenhouse emissions go up, not down.

And the operative phrase: "short term."  At least three decades.

Didn't get the memo: Goldman Sachs owned up to being completely wrong on the price of oil, their forecasts; their analyses. It looks like Raymond James has not gotten the memo.

Whether the myths are completely/partially right, wrong, or indifferent, the fact is oil is nowhere near what Raymond James forecast; there is no indication that oil will rise significantly in price in the next 12 months; and, all indications are that it will take 70+ weeks to "re-balance."

[If the link is broken, Raymond James is maintaining that the "bear market for oil is/was caused by "fake news." Raymond James notably neglected to bring up one of their own old calls: that WTI would touch $80/bbl this year. Halfway through the year, oil is at $45/bbl -- at the peak of the US driving season. One other comment: Bloomberg certainly wrote a long article on this.]

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Grilling In Montana

Independence Day - 2017

 Updates

Original Post 

Don't try this at home. We found it easier to grill inside so we didn't have to bring all the "other stuff" down to the Weber.

The overhead vent for the stove worked just fine. [Update: based on comments this generated, apparently a lot of folks did not realize this was a joke. Do not grill inside.]

The Permian Natural Gas Pipeline Network -- RBN Energy -- July 5, 2017

Active rigs:

$46.40	7/5/2017	07/05/2016	07/05/2015	07/05/2014	07/05/2013
Active Rigs	57	31	76	191	188

RBN Energy: existing and planned natural gas pipelines out of the Permian.

Permian gas pipeline takeaway capacity now totals about 11 Bcf/d. That may sound like plenty, given that gas production in the region is still well below 7 Bcf/d. But under RBN’s Growth Scenario forecast, Permian gas production rises to 8 Bcf/d in 2018 and, more troublesome yet, a number of the existing and new pipes to Mexico will be running far less than full because of south-of-the-border delays in completing Mexican pipelines and gas-fired power plants.

That means the Permian may be on the brink of being constrained from a pipeline takeaway capacity perspective — a situation that could lead to price-differential spikes until new gas pipeline capacity comes online. New gas takeaway capacity from the Permian to the Agua Dulce Hub is under development; for example, there is NAmerico Partners’ proposed Pecos Trail Pipeline and Kinder Morgan’s planned Gulf Coast Express — but these pipes wouldn’t be available until 2019, too late to avert what could be a 2018 takeaway crunch.

To understand the gas-takeaway challenges the Permian faces, it is important to understand the many pipeline systems already in operation in the region, how they fit together, and where gas out of the Permian flows.

Most of the gas exiting the region flows through the Waha Hub in Pecos County, TX (the southern part of the Permian’s Delaware Basin); the rest leaves via the El Paso-Permian Hub.

Today we begin a pipe-by-pipe review of the major gas pipeline systems that connect to Waha and the El Paso-Permian hubs — a review that will describe the pipes and their history as well as the markets they serve and the volumes that typically flow on them.

Coal: Sixteen Hundred (1,600) New Coal Plants In 62 Countries -- A 43% Increase -- July 5, 2017

For the archives. Link at JoanneNova.

Tell us again how shutting down coal stations in Australia will change storms, floods and cyclones in 2099?

Meanwhile New Zealand has doubled the amount of fossil fuel it uses to make electricity, new figures show as "hydro lake" dries up.