The Market, Energy, Political Page, T+51 -- October 2, 2018

Technology: awesome. Last night was our local "Neighborhood Night Out." The price of admission: something to share with everyone. I used the Chick-Fil-A app for the first time -- earlier in the afternoon I ordered chicken strips to be picked up at 5:30. I arrived at the restaurant at 5:20 p.m. The chicken strips came out at exactly 5:30 with all the "stuff" one needs to serve, including napkins and plastic tongs. I was more than impressed. I can see why millennials use mobile to order.

Pre-market trading: tea leaves suggest another huge data. Dow (irrelevant) already nearing another 100-point gain. Look at AAPL. WTI steady; apparently all that $100-oil talk on "pause." EIA weekly data will be released in a couple of hours.

Boom! Permian will need $300 billion in CAPEX for growth through 2023 -- that's only five years from now -- Rigzone. Predictions --

• rise by up to 3 million barrels of oil equivalent per day
• possibly produce up to 5.4 billion barrels of oil equivalent per day
• have a need for up to 41,000 new wells (mostly unconventional) to be drilled to meet production outlook
• require more than $300 billion in capital expenditures (CAPEX) to keep pace with growth projections

LNG Canada: may be first of many -- Bloomberg. The $14 billion LNG Canada contract goes to Fluor and JGC.

Davis Refinery -- southwest North Dakota. Press release from Meridian Energy Group. The press release will probably "disappear" in six months. Part of it:

Nearly five years ago, Meridian had set out to do what no other organization had ever attempted – engineer and design the first full-conversion refinery in the US to achieve Synthetic Minor Source status for air quality, and Meridian accomplished that task on June 13th, 2018. However, even before Meridian was able to apply for the Permit to Construct (“PTC”) application from the North Dakota Department of Health – Air Quality Division (“NDDoH”), the Meridian had to apply for siting permissions in the form of a Rezoning and Conditional Use Permit (“CUP”) from Billings County. As part of the CUP process, the County was tasked with the comprehensive review of the location of the Davis refinery and its impact on the local environment and surrounding areas. Billings County issued CUP in July of 2016 after a review so detailed it took approximately 2 to 3 times longer than a typical review of similar magnitude.

With the siting of the Davis Refinery fully approved by Billings County, Meridian completed additional site-specific engineering and in November of 2016 submitted its application for the PTC to the NDDoH, beginning an 18-month review of the Davis Refinery engineering by NDDoH. The PTC application and supporting engineering represented a convergence and integration of the latest and best available control technology ever assembled in a modern refinery. The scrutiny and demands made by the NDDoH were intense, including the need for the Davis Refinery to achieve and maintain Class 1 Air Quality standards during full operation due to its proximity to the Theodore Roosevelt National Park.

Bakken crude oil waterborne price will now be available through Argus. Link here.

A waterborne assessment for Bakken crude will be published from today by the leading global energy and commodity price reporting agency, Argus. The new assessment will provide clarity for exporters about the value of Bakken cargoes loading from ports on the US Gulf coast.

Bakken is a light sweet crude produced in a formation that spans North Dakota and Montana in the US, and parts of Canada. Production of the grade was 1.5mn b/d in September. Until now, Bakken has been priced along the US pipeline delivery chain — including at Clearbrook in Minnesota, Cushing in Oklahoma (the delivery point for Nymex light sweet crude futures), and the refining cluster at Beaumont/Nederland on the Texas coast.

Argus' new price will be for cargoes of 500,000-650,000 bl loading at Beaumont/Nederland 15-45 days ahead of the day of assessment. Daily price assessments will be published in the Argus Crude and Argus Americas Crude services.
The completion of Energy Transfer Partners' 525,000 b/d Dakota Access Pipeline in June last year has allowed more Bakken light sweet shale oil to move to the US Gulf coast for domestic and export markets. Bakken crude comprises around 185,000 b/d of overall US exports of up to 2.2mn b/d, meaning that the Bakken export market has become large enough and transparent enough to merit assessment of a spot waterborne crude price.

I've got a secret!