The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2017 is 3.3 percent on December 14, up from 2.9 percent on December 8.
The forecast of fourth-quarter real consumer spending growth increased from 2.5 percent to 3.2 percent after yesterday's Consumer Price Index report from the U.S. Bureau of Labor Statistics and this morning's retail sales release from the U.S. Census Bureau.
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Best Christmas Present So Far
We
opened some huge boxes that contained a lot of little boxes. Our middle
granddaughter suggested we do something creative with all the boxes. My
suggestion: play "charades" with the boxes. One stacks the boxes in
different configurations and others guess what the stack represents. The
"Sears Tower" was the best; reached from the floor to the high ceiling.
Our
son-in-law was a US Navy submarine officer for many years, so the next
idea was a no-brainer. Later we put a periscope up but no photo and by
now the boxes are pretty much destroyed from over-use. But on the wood
floor, Sophia's submarine could move about 15 knots -- in extremely
short spurts. The only thing we needed was a dog chasing the u-boat.
Next
year, for her Christmas presents, I'm just going to go down to the
neighborhood U-Haul store and buy some oversize boxes for about
$1.50/box -- a lot less expensive than actually buying something to put
in the boxes.
December 17, 2017: a reader sent the original post to a friend in Canada. The Canadian reader disagreed with me, saying that Justin Trudeau was in favor of "the Canadian oil sands pipeline." The reader had not heard of George Butts, but this would be like Hillary, had she been elected president, making Tom Steyer her "principal advisor." And this is the problem with folks who are unaware of the persistence of socialists: they are "taken in" by smooth talkers but are unaware of the inner circle advising their elected leaders.
Justin Trudeau can be "for anything he wants to be," depending upon which audience he is addressing, but it doesn't take a rocket scientist to know where his allegiances lie, see clip below.
Unfortunately this is a long clip but skip ahead to 2:05 to hear George Butts in his own words:
Confused About Canada's Energy Policy?
It will be interesting to see how "Canada" and Justin Trudeau respond to $30-oil.
Original Post
A reader sent me a note regarding Canada's Justin Trudeau's principal advisor: George Butts. This is what would have happened to us had Hillary been elected. George Butts is Tom Steyer on steroids. George Butts doesn't have the money but he has the power. He is Trudeau's principal advisor on energy (and I assume most everything else). Prior to his current "job," he was president and CEO of the World Wildlife Fund Canada, a global conservation organization. In 2014, Maclean's magazine declared Butts to be the fourteenth most powerful Canadian.
I didn't think that article was of particular interest -- to me it was just another political debacle for the Canadians. So I did not post it and had no plans to post it. Then something else just popped up -- again, another article from a reader, which we will look at farther below, but first:
This is not a rhetorical question. I am truly curious. US refineries are optimized for heavy oil; that's what the Keystone XL pipeline was all about -- bringing heavy oil from western Canada to US refineries along the Gulf coast. Of course that has not panned out.
oil from Canada's oil sands is now selling at $27/bbl discount relative to WTI -- the sharpest difference in more than four years
Western Canada Select (WCS): benchmark for oil from Alberta's oil sands, has plunged in December, falling to just $30 per barrel at the end of this past week
reflects:
different quality from lighter forms of oil
extra transportation costs to move oil hundreds of miles out of Alberta
but a discount is usually something like $10/bbl; not more than $25
a price deterioration of this magnitude has not been seen in years
reasons for increased transportation costs: CBR is imploding; perfect storm
TransCanada's Keystone pipeline capacity was slowed in November while the company made repairs
led to a glut of WCS; WCS was diverted into storage as the pipeline underwent repairs
second, railroad companies were unable to accommodate the oil industry on short notice; equipment constraints and crew constraints (one wonders if such constraints are worse in a liberal-leaning/regulation-heavy country like Canada vis-a-vis the US)
Canadian oil companies have been tied up trying to ship delayed oil cargoes; have not been able to accept oil shipments
Much more at the linked article.
My hunch: Justin Trudeau is receiving a lot of angry phone calls from Alberta but George Butts is more than happy with how things are turning out. Butts leads the "keep-fossil-fuel-in-the-ground" parade.
the Zohr field may turn Egypt from LNG importer to gas exporter
Egypt’s Eni SpA-operated Zohr natural gas field will bring the country closer to its goal of energy self-sufficiency
discovered in 2015 by Italy’s Eni, the field contains an estimated 30 trillion cubic feet of gas
Gas from the Mediterranean’s largest offshore field is pumped to a
facility in Port Said city, to be prepared for delivery to the national
distribution network, with initial production of 350 million cubic feet
per day. Daily
output is set to rise to about 1 billion cubic feet in June and 2.7
billion by the end of 2019, he said.
So just how big is that "giant" field that has captured Bloomberg's attention? For natural gas, about the same size as the Bakken?
First the data points again, from that huge Egyptian gas field:
350 million cubic feet per day initial production
1 billion cubic feet per day by June (2018?)
2.7 billion cubic feet by the end of 2019
Natural gas production from the "oily" Bakken, North Dakota, October, 2017 (most recent month being reported)
63,918,772,000 cubic feet for the month of October
divided by 31 days = 2,061,895,879 bbls/day OR 2.061 billion cubic feet
It would be nice for Bloomberg to provide some comparison with the Bakken or the Permian. Thank you very much.
Sabih al-Masri, a Palestinian billionaire and the chairman of
Jordan’s largest lender Arab Bank, was detained in Saudi Arabia for
questioning after a business trip to Riyadh, family sources and friends
said on Saturday.
They said Masri, a Saudi citizen and Jordan’s
most prominent businessman with holdings in hotels and banking, was
detained after heading to the Saudi capital last week to chair meetings
of companies he owns.
Masri, who originally comes from a prominent merchant family from Nablus
in the Israeli-occupied West Bank, amassed a fortune from partnering
with influential Saudis in a major catering business to supply troops
during the U.S.-led military operation to retake Kuwait from Iraq in the
1991 Gulf War.
Apparently he did not receive the memo:
Confidants said Masri had been warned not to travel to Saudi Arabia
after mass arrests last month of Saudi royals, ministers and businessmen
in the biggest purge of the kingdom’s affluent elite in its modern
history.
My hunch: the Russians intercepted the advice not to go to Saudi Arabia, and Masri thought all the CNN reports about Prince Salman rounding up rich folks in Riyadh was simply "fake news."
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Notes From Twitter
Brexit:
India in 1947 had rather less difficulty gaining its independence than we are having in 2017 leaving the Brussels empire. Time for Boris to go the full Gandhi.
Bakken economy:
Too many data points in this article to go through -- I will archive the article because it will disappear over time -- but for now, simply this: the public school enrollment continues to grow beyond expectation in North Dakota's oil patch.
Some years ago I said the metric to follow if one was curious whether families would remain in the Bakken "after the boom" was to follow school enrollment figures. In the very, very early days of the boom, "experts" said oil workers (mostly men) would be coming to work in the Bakken but their families would not join them, and that eventually the workers (and any families that might have joined their working spouses) would leave the state.
Apparently, to a large extent that did not happen.
Maine governor wants to get rid of solar panel subsidies:
Maine's Republican governor says he wants to reverse regulators' move to delay a gradual ramp down in compensation for new solar panel owners who generate excess energy. LePage has said utility regulators should have gotten rid of the financial incentive system altogether.
By the way, if there is a shortage of money for North Dakota public schools, the Legislature is authorized to start spending oil money from the "Legacy Fund" as of June, 2017.
Another nuclear reactor ordered to shut down in Japan: link here.
December 16, 2017: a reader writes, wondering when ND will start reporting new production records?
A few months ago I was impressed with how many wells produced over 30,000 bbls in one month in the Bakken.
We are now up to 96 wells that have produced more than 30,000 bbls in one month!
Well #52 and #73 on the list of wells produced greater than 30,000 bbls in one month are both EOG wells.
Thirty-four (34) wells in four (4) different counties produced over 40,000 bbls of oil in October. Fourteen (14) wells by 7 different operators in 6 different fields produced over 50,000 BBL per month. Three different operators in 2 different fields are producing over 70,000 BBL!!!!
I could be wrong, but the Newsweek headline ("up slightly") appears to have been written by Barack Obama based on headlines from Platts and Oil & Gas 360. In fact, I believe on a "boe" basis, North Dakota has set a new production record.
The president was either ignorant of America's entrepreneurial spirit and the Bakken revolution already occurring or he was colluding with the Saudi Arabians and George Soros to kill the US oil industry
Production, crude oil:
December, 2014, all-time record: 1,227,483 bopd
October, 2017: 1,185,499 bopd
Production, natural gas:
December, 2014: 1.51 billion cubic feet per day -- 1,510,858,000 cubic feet / day
October, 2017: 2.06 billion cubic feet per day-- all-time record (2,061,895,838 cubic feet / day)
Production, boepd (this may be an all-time record; I often make errors, and I only checked these two months):
