Gasoline Availability And Prices Improving Post-Harvey -- September 4, 2017

Overnight the price of regular gasoline dropped a dime/gallon but still the majority of service stations in our area were still out of gasoline. But in the big scheme of things, the availability of gasoline seems to be improving in the DFW area.

From Reuters: US crude edges higher and gasoline tumbles after Harvey.

"Tumbles" may be a bit too strong of a word but at least the price of gasoline is dropping.

***********************************

Learning To Play Chess With Her Dad

Today's lesson: just learning where the pieces go and the opening move. LOL.

Tesoro Uses Organic Oil -- That's Why President Trump Will Visit North Dakota -- September 4, 2017

I was wondering why President Trump would fly all the way out to Bismarck-Mandan, ND, to visit an oil refinery.

A reader explained it to me: the Tesoro refinery uses:

• American oil (Bakken oil, to be specific); and, 
• organic oil.

Note: Tesoro changed its name to Andeavor on August 1, 2017. 

***************************

The American Road Trip

The WSJ has a great essay in this week's "Review": The Romance of the American Road Trip.

My second car was a muscle car, a 1973, Chevrolet SuperSport Nova. My dad bought it for me from a dealer in Williston (on the Million Dollar Way) and I drove it out to California. Those were my coming of age years and I remember sharing many wonderful drives in that care with three different women over the course of several years. One of the three is now my wife.

Some decades ago I was concerned that our granddaughters would never  have that same opportunity to enjoy the "American road trip." Not to worry any more. The Bakken shale revolution changed all that.

Apparently, the writers of "The Romance of the American Road Trip" had the same thoughts. The American road trip is back.

The article begins with Zelda and F Scott Fitzgerald who, on the spur of the moment, took a 1,200-mile journey from Westport, Connecticut, to Montgomery, Alabama, after Zelda complained that the north did not have authentic Southern biscuits and/or fresh peaches.

The writer goes on to write about essays of the American road trip to include references to Edith Wharton's 1934 autobiography, A Backward Glance.

From the article:

Not much on Earth can beat the American road trip in travel for a sense of freedom -- no pat-down, no passport, no airport muddle, just revving an engine and leaving at will. Thought the driverless cars that await us might have their uses in dense city traffic or on tedious LA freeways, they will certianly diminish the exuberance of a driver gripping the wheel, flooring it and rejoicing, "Eat my dust."

And later,

Nowhere else int he world (though Canad is a contender) is it possible to drive 3,000 miles -- the distance from Boston to Los Angeles -- and be certain that you will encounter no roadblocks or obstructions; that you will always find a place to stay and somewhere to eat; and that you will be privileged to observe a river the equal of the Ganges or the Yangtze, mountains as great as the Himalayas, a desert as dramatic as any in Africa or Asia, and fertile fields and pastures of grazing animals unmatched in the world.

My next road trip will be from Portland, OR, to Flathead Lake, Montaan, albeit a short trip in the big scheme of things.

*************************

Bayou

The WSJ also had a nice essay on the word "bayou."

“Bayou,” meaning a slow-moving creek or river, is a term used all around the Gulf Coast region. It might not be so well-understood elsewhere, however. Merriam-Webster registered that 100 times more people than usual looked up the word in its online dictionary over the weekend, when Harvey was first bearing down on Houston.

People from outside the region may be vaguely familiar with the word’s meaning from songs like “Blue Bayou” by Texas native Roy Orbison (a song later covered by Linda Ronstadt ) or “Born on the Bayou” by Creedence Clearwater Revival, from their 1969 album “Bayou Country.” (Actually, the band’s main songwriter, John Fogerty, was born in Berkeley, Calif., and had little experience with bayous.)

The word “bayou” looks and sounds French, but its origin is actually Native American. It is originally derived from “bayuk,” meaning “a small stream” in the Choctaw language historically spoken in Mississippi, Alabama and Louisiana. Most members of the Choctaw tribe were forcibly relocated to Oklahoma in the 1830s, though about 5,000 Choctaw speakers can still be found in Mississippi.

“Bayou” entered the American varieties of French and English in the 18th century, but scholars believe the word first passed through a Native American lingua franca called Mobilian Jargon, a simplified pidgin that allowed members of different tribes to communicate with each other for trade purposes.

French speakers in Louisiana, then a territory of New France, picked up the Choctaw word “bayuk” from the trading jargon, and they turned the word into “bayouque” and eventually “bayou.” English speakers borrowed it from French, though the spelling took a while to settle down. In 1767, while on a river trip through the South, Captain Harry Gordon wrote in his journal about navigating his way out of New Orleans, saying that he “lay that night at the Bayoue.”

By the time Houston was founded in 1836 at the confluence of Buffalo Bayou and White Oak Bayou, the term was a common part of the Gulf Coast landscape. It would become so intimately associated with Houston that only 20 years after its founding, in 1856, it had earned the nickname “Bayou City,” according to research by the word historian Barry Popik. In the mid-20th century, Houston also got called “Baghdad on the Bayou,” modeled on the short-story writer O. Henry’s affectionate name for New York, “Baghdad-on-the-Subway.”  

Much more at the link.

Born on the Bayou, Creedence Clearwater Revival

Monday Morning, September 4, 2017 -- Markets Closed -- Labor Day Weekend

President Trump to visit the Mandan (ND) Tesoro refinery on Wednesday, September 6. Link here. 

Global market headlines: markets "dip" after North Korea tests its largest nuclear device to date. "Dips" is right. I don't think any Asian market of note dropped more than 0.75% but I could be wrong; I checked early; did not check the close.

Active rigs in North Dakota:

$47.53→	9/4/2017	09/04/2016	09/04/2015	09/04/2014	09/04/2013
Active Rigs	56	33	75	196	188

*************************************

ExxonMobil To Invest $200 Million In Argentina's Vaca Muerta

Link here.

Attracting investment to the Belgium-sized Vaca Muerta play, one of the world's largest unconventional gas reserves, is a key priority for Macri's business-friendly administration as it seeks to boost local energy production in order to reduce costly imports.

Last year, Exxon said it could invest more than $10 billion in shale projects over 20 to 30 years in the region. In January, Macri reached a deal with unions and companies to lower very high labor costs and attract investment, though executives note that logistics costs remain high.

***********************************

Big Oil to be "usurped" by gas in less than a decade -- The [London] Telegraph.

One of the world’s biggest risk assurance experts in the global energy ­industry has predicted that gas will emerge as the world’s most important source of energy by the mid 2030s ­after a slow descent for oil which will peak within ten years and the ongoing decline of coal.

Remi Eriksen, the boss of Norway’s DNV GL, said the group’s first conservative prediction for the future of the global energy industry has revealed a boom in renewable energy which will meet around half the world’s needs – but gas will be the largest single source of energy for decades to come.

“Gas will overtake oil as the world’s biggest source of energy by 2034. By 2050 it will be the single biggest source at 27 percent of demand,” he said. He added that the demand for gas will tower over the use of individual renewable energy sources such as wind, hydro and solar power, although when totalled ­together renewable energy will make up 50pc of energy use. 

“There will be oil and gas in the future, and there will need to be further exploration of our resources because the depletion of existing ­reserves will be faster than the drop in demand,” he said.

“But it will all depend on cost. The other factor is electric vehicles which by 2030 will really take a bit out of oil consumption from cars,” he added.

For the archives: "the number of coal powered cars has shot up to 2 million worldwide." The article does not say how many automobiles are currently in use worldwide. The number is 1.015 billion (US publisher Ward's estimate). Two million EVs represents 0.2% of all global automobiles. 

Speaking of coal-powered cars, two articles from two contributors over at SeekingAlpha regarding Tesla.

• first, this contributor is bullish on Tesla;
• second, this contributor feels Tesla cannot meet its production goals. 

The only reason I'm posting the first Tesla link is because it provides the data I was looking for (see below).

The second contributor seems a lot more credible. 

I think we will know by the end of 2017, if not sooner, whether Musk Melon can meet his production goals for the Model 3. The other day I posted the EV sales data for August, 2017. Tesla delivered 30 Model 3 vehicles in July, 2017; and, 75 Model 3 vehicles in August.

What is the most current Tesla guidance for Model 3 production? According to the first linked SeekingAlpha article above, posted July 31, 2017:

• July, 2017: 30
• August, 2017: 100
• September, 2017:1,5000
• December, 2017: 20,000 

So, did Tesla meet its August guidance? No. Tesla delivered 75% of what it said it would. 

I don't know if Phil LeBeau mentioned that. 

*******************************

The Real Cost For The Tesla Model 3

Tesla is marketing the Model 3 for "mainstream" drivers, for those who would otherwise buy the Honda Civic (around $30,000).

The contributor at the first Tesla link above, he who is bullish, provides the likely cost of the Model 3:

I expect a majority of Model 3 owners to, either at the time of initial purchase or later with an over-the-air software update, opt for the enhanced autopilot ($6,000 after delivery) and full self-driving (additional $4,000 after delivery) features. [$6,000 + $4,000 = $10,000].

The second major consideration is recognizing that customers prefer longer range. As happened with Model S, more than estimated percentage of potential Model 3 customers may opt for the long-range battery, which comes at an additional cost of $9,000.

I estimate that the split between the base model and long-range options will approximate 50:50, but readers should note that this is a very rough initial estimate that is subject to change as more data and management guidance become available.

Readers should also note that Tesla has prioritized the production of cars with long-range batteries in 2H17, which leads to a higher ASP estimate for 2H17 than in 2018.

Putting these two primary considerations together, I estimate that Model 3's ASP will approximate ~$55,000 in 2H17 and ~$47,000 in 2018.

Again, this writer is bullish on Tesla.

Update - September 6, 2017. Full EV sales for August, 2017, have been posted: