The U.S. Environmental Protection Agency (EPA) has granted an oil
refinery owned by billionaire Carl Icahn a waiver from the biofuel
blending regulations—a waiver typically given to companies in financial
hardship.
Under
the Renewable Fuel Standard (RFS), oil refiners are required to blend
growing amounts of renewable fuels into gasoline and diesel. Refiners
that don’t have the infrastructure to blend biofuels must purchase
tradeable blending credits known as Renewable Identification Numbers, or
RINs.
The EPA has the authority to grant waivers from the renewable
fuel standard to refineries whose oil processing capacity is below
75,000 bpd if the companies owning the refinery can prove that the
credits they must buy are causing them financial hardship.
The EPA
waiver for the 74,500-bpd Wynnewood, Oklahoma, refinery owned by
Icahn’s CVR Energy has been granted in recent months, Reuters sources
said, without specifying exactly when the waiver was given.
“This
one’s going to be hard for [Scott] Pruitt to explain,” Brooke Coleman,
head of the Advanced Biofuels Business Council industry group, said in
an email to Reuters on Friday, referring to the EPA administrator.
Is he required to provide an explanation?
"... if the companies owning the refinery can prove that the
credits they must buy are causing them financial hardship." I assume any CFO worth his/her salt could show how RINs are causing financial hardship.
It depends on the definition of "financial hardship." Bill would know.
It will be interesting to see if this gets linked on the Drudge Report tomorrow.
May 1, 2018: see first comment -- US oil production is now up 804,000 barrels per day year to date (from
12/29), so at that rate we'd see an increase of over 2.5 million barrels
per day this year alone...putting that into perspective, the OPEC oil
production cuts of 1.2 million barrels per day have been less than half
of that...
I have never paid attention to Angola. When I saw this story, I did not think it would amount to much, but then I checked the EIA import data.
From Bloomberg: OPEC cuts may go deeper as another member sees output slump. In addition to Venezuela, now it's Angola.
Angola, once Africa’s biggest crude producer, is suffering sharp
declines at under-invested offshore fields, with output dropping almost
three times as much as the nation pledged in an accord with fellow OPEC
members. With the losses set to accelerate -- a shipping program seen by
Bloomberg News shows crude exports will fall in June to the lowest
since at least 2008 -- the cartel risks tightening supply too much.
“Angola has a serious problem, with its decline rates becoming
increasingly visible,” said Richard Mallinson, an analyst at consultants
Energy Aspects Ltd. in London. “The low figure in June doesn’t look
like a pattern of maintenance but points to steeper, structural
declines.”
Look at the EIA data. Since 1993 there have only been two times in which monthly imports dropped below the one-million-mark and even at that, one million bbls/month is incredibly low.
We were in Chicago this weekend. Chicago is the "friendly" side of NYC. Wow, the folks were incredibly nice. They appear to enjoy life and enjoy Chicago.
It was slightly on the cool side but no rain; the sun was out but inside the Loop it was sometimes hard to find.
We were in Chicago to attend our older daughter's graduation from Rush University with an advanced degree.
We arrived at O'Hare about 8:00 p.m. and all seven of us piled into an Uber Infinity and headed into Chicago. [Speaking of which: each of us had no more than an overnight bag except for our daughter with one checked bag. That made all the difference. Any additional luggage and a second Uber would have been needed. Recommendation: any trip less than 72 hours -- nothing more than an overnight bag -- makes traveling so much easier.]
Wow, it was a long ride. I assume it took about an hour from the airport to downtown Chicago.
Our son-in-law had planned that we would head directly to bed.
But after checking in at the Gwen Luxury someone suggested a late snack. The concierge suggested the Quartino, about three blocks away -- the best Italian restaurant in the US? Maybe. It was incredible. Known for its "small plates," we took advantage. Wow, we had so many small plates among the seven of us I quickly lost count.
Sophia loved the loud, energized, family-friendly environment; 10:00 o'clock at night and she was just getting started -- wow, was it loud and fun! Sophia grabbed a slice of bread even before the waitress had a chance to place it on the table. After our first round of ordering, I took Sophia back to see the kitchen.
The pizza-chef was incredibly friendly. Sophia was "demanding" something she saw in the kitchen -- I didn't know what she was "talking" about but the pizza-chef figured it out. She was looking at small meatball-like hors d'oeurves with a toothpick in them. She has had them before and loved them. So the pizza-chef brought a plate of the appetizers over to our table -- complimentary, of course, but we made sure that the waitress put them on the tab -- only to find out that they were not meatballs. They were dates wrapped in pancetta, stuffed with gorgonzola dolce and drizzled with honey. I loved them; Sophia did not. She had more bread.
[I can't say enough about the waitress. She seemed to be enjoying the evening as much as we were, and she had no problem with all the ordering, and then "stuff" coming directly from the kitchen per Sophia's requests. I really appreciate waitstaff that can immediately size up the party. I think she immediately knew that "specifics" were not important. Bring anything. No one was keeping "score." Somehow it will all work out. I don't think she could hear us over all the commotion; she could "read lips." LOL.
[It's funny how things work(ed) out. It was 10:00 p.m.; the place was packed, and yet, we were brought over to a huge round table that sat seven. Had one not known better, one would have guessed we had reservations. ]
The granddaughters and my wife had pizzas of various types. Our granddaughter had grilled octopus; our son-in-law had eggplant parmigiana. All the "small pates" would easily serve two -- I didn't have any eggplant but I had plenty of octopus. I'm looking forward to grilling octopus this summer. I think the octopus was on a plate of sauteed spinach, but I could be wrong. [I obviously knew what it was at the time, but I've since forgotten; all the small plates came with so many vegetables.]
There were so many choices of salumi I simply told the waitress to
bring what she thought best. Wow, incredible. And green olives.
Everyone had water but I had a cocktail. If I recall correctly, a tailfeather.
My entree: Angus beef carpaccio. "Angus beef" on the menu simply jumped out at me. I've had steak tartare in Paris but never carpaccio. I loved it, but it's a woman's entree, to be honest. But as a "small plate," awesome.
May 2, 2018: I obviously should have done the math ... the Daily Caller appears to have been so far off as to have been an idiot. The writer has gone back and corrected his mistakes, but he is still misleading the American reader. First, he doesn't make it clear that he is using "Canadian" dollars in the headline; and second, he doesn't make clear that he talking about the Canadian gallon which is very different than the American gallon.
1. From wiki: The US gallon is used in the United States and is equal to exactly 231 cubic inches or 3.785411784 liters.
4. Conversion, C$ to US$: US$4.56 -- not much more than what it is in Los Angeles, CA
May 1, 2018: why $6/gallon gasoline of $8/gallon gasoline or even $12/gallon gasoline does not bother those living in British Columbia -- "an absolute gong show." Move over Vancouver. Whistler, two hours north of Vancouver, BC, is now Canada's craziest housing market. A detached house in Whistler is now $1.67 million, 4% more than in Vancouver, and businesses are buying properties to house employees as living costs drive out workers. Whistler is now the most expensive Canadian city to live in.
Benchmark property prices in Whistler, the ski town two hours north, have now surpassed those in the Pacific Coast city. Businesses are buying million-dollar properties to house employees as living costs drive out workers. The cost of visiting has also spiralled, with overnight rates during the winter peak topping anywhere else in the nation.
Later, 10:47 p.m. CDT: see first comment. Apparently someone over at The Daily Caller did the math incorrect. I don't know. I didn't do the math. Didn't want to get into Canadian vs US dollar. Five hundred-thirty-four comments (and counting) comments at the Daily Caller article.
But that high price is offset by free medical care in Canada, so it all works out.
Oh, by the way, British Columbia, is fighting the Trans Mountain pipeline project.
What's the plural of doofus?
***********************************
Tesla This Should Be Fascinating
Only two days from now, Tesla presents quarterly earnings. From twitter today, from something called "the credit strategist":
Disclaimer: this is not an investment site. Do not make any
investment, financial, job, travel, or relationship decisions based on
what you read here or what you think you may have read here. If this is
important to you, go to the source.
Disclaimer: I make a lot of simple arithmetic errors. I often see
things that do not exist; I read quickly and miss important points.
Sometimes it takes me days (maybe even weeks) to see where I was wrong.
Chart of the day. Good luck to all. But to leave you with this. From Bloomberg, companies are beating earnings estimates at historic clip.
Whether it’s the U.S. tax cut or just poor forecasting by analysts,
members of the S&P 500 Index have been delivering profits above
estimates at the best pace on record -- with 80 percent of members
topping forecasts so far.
Books: Might really be a good time to re-read:
Best tweet of the day:
Real leadership:
... and that's why Kanye West likes Trump -- the latter tweets what is on his mind -- while he is alive and robust -- not when he is on his deathbed.
Just plain wrong: if the Iranians are desperate to save the deal, it tells you how bad the deal really is. And remember, the deal was made by Obama. Scott Adams has a great periscope on the Iran deal. From CNBC:
French President Emmanuel Macron and Iranian
President Hassan Rouhani spoke by telephone on Sunday and agreed to work
save the 2015 Iran nuclear agreement
Macron and German
Chancellor Angela Merkel were in Washington last week, tyring (sic) to
persuade President Trump not to pull out of the Iran deal.
Trump sees three defects in the agreement, and he's repeatedly threatened to tear up the 2015 accord.
Things heating up in the Mideast. That's what the pundits say. How does one really know? Check the spot price of WTI. It's up 19 cents. Ho-hum.
Disclaimer: this is not an investment site. Do not make any
investment, financial, job, travel, or relationship decisions based on
what you read here or what you think you may have read here. If this is
important to you, go to the source.
Disclaimer: I make a lot of simple arithmetic errors. I often see
things that do not exist; I read quickly and miss important points.
Sometimes it takes me days (maybe even weeks) to see where I was wrong.
Honduran caravan: already off the Drudge Report banner. Short-lived. If anyone has ever been through TSA at Chicago's O'Hare, one knows the ICE will manage the southern border just fine. But had it been me, I would have removed ICE from along the San Diego-Tijuana border; let Jerry Brown manage it. A few hundred additional Central Americans in southern California would hardly be a problem.
... the oil reserves of Saudi Aramco has more than confirmed the official
figures released by Riyadh for three decades, putting the number at 270
billion barrels.
The figure may come as something of a surprise because
for thirty years, Aramco has been reporting unchanged reserves of about
261 billion barrels despite active production. Yet barrels are not the
only factor considered in an oil company’s valuation as Bloomberg
Gadfly’s Liam Denning noted in an analysis earlier this year, even
though they are an important indicator of the company’s long-term
viability and profitability.
Comment: 270 is a nice round number. Easy to remember. But the number would have been more believable had the reserves come in at 274.3 billion bbls or maybe even 269.75 billion bbls.
The "studio version" is available, but I wanted to "see" Emmylou. The video is of poor quality, but until I find a better version, here it is:
Save The Last Dance For Me, Emmylou Harris
I have no idea if there is any connection between New Mexico and Emmylou Harris but whenever I see her, she reminds me of New Mexico. Linda Ronstadt? Arizona, of course.
From wiki:
Harris is from a career military family. Her father, Walter Harris (1921-1993), was a Marine Corps officer, and her mother, Eugenia (1921-2014), was a wartime military wife. Her father was reported missing in action in Korea in 1952 and spent ten months as a prisoner of war.
EOG's oil production improvements per well from 2016 to 2017 are muted when compared to other Delaware operators
EOG's results are still better than most other operators, and decreased improvement could be due to the high bar set in 2016
EOG still has the best well design in the industry, and
results should be watched closely as it best provides insight into where
the industry is headed
These results are simply incredible:
We pulled the data on 199 EOG Delaware Basin locations completed in
2017. This was done as a comparison to provide an idea of whether it has
seen an improvement per location. It's best performing location was in
Loving County. It produced 413 MBO in the first 6 months of well life.
Over 20 locations model to more than 300 MBO in the first year of well
life. These results are excellent, especially when we consider only 34
have a lateral length above 9,000 feet.
EOG: wow, back up to $118.
Disclaimer: this is not an investment site. Do not make any
investment, financial, job, travel, or relationship decisions based on
what you read here or what you think you may have read here. If this is
important to you, go to the source.
Disclaimer: I make a lot of simple arithmetic errors. I often see
things that do not exist; I read quickly and miss important points.
Sometimes it takes me days (maybe even weeks) to see where I was wrong.
For long term investors: don't get hung up on individual "plays" you may have missed -- follow the story lines. Do you really think that MPC is the only one that sees the future?
Road to New England: Bostonians see the light? Potential closure of Boston power plant raises new concerns. From The Concord Monitor.
The threat by the owner of a huge gas-fired power plant near Boston
to shut down unless it can make more money selling its power has added
more urgency to a long debate about how to maintain the stability of the
region’s power grid during winter, and how to get the six New England
states to share the expense.
“The big elephant in the room is cost
allocation. We’ve already said that we think this is a cost that is
regional in nature. ... This is an energy shortage problem during the
winter, that will affect the whole region,” said Gordon van Welie,
president of ISO New England, the quasi-governmental group that oversees
the region’s electric transmission system. “No one’s going to escape
the effects of the problem, and so therefore we think the region as a
whole should pay for this problem.”
To ensure reliable fuel supplies for Units 8 and 9, plant owner and Exelon subsidiary Exelon Generation Co. LLC is also buying ENGIE North America Inc.'s Distrigas liquefied natural gas import terminal in Boston during the rest of their operations.
Comment: I thought wind and solar had solved all of the energy problems for New England.
Comment: Reality sucks.
Comment: the problem is not whether there will be enough energy for New England; it's a matter of how much the middle class will be squeezed by incredibly high utility rates going forward. But, no, Beacon Street won't go dark. And Bostonians won't freeze -- but they will pay dearly for heat and light.
OPEC's multi-year attempt to steer the oil market by focusing on
inventory levels was always like trying to drive a car while looking
only in the rear view mirror. The inventory data is historical and
reflects what the market was like a month or more ago. By the time OPEC
gets the data, the world has already moved on.
If you thought that was a bad idea, wait until you hear this.
The
most important metric for OPEC and its friends, according to Saudi oil
minister Khalid Al-Falih, is the level of investment in future oil
production capacity. Speaking after the group’s gathering in Jeddah on
April 20, he said they all need to promote confidence in the long-term
market in order to attract capital, not to target price.
The world needs to add 4 million to 5 million barrels a day
of new production capacity each year to meet rising demand and offset
declines, he said. The industry is far from reaching that goal.
Comment: the big story in that article -- The world needs to add 4 million to 5 million barrels a day
of new production capacity each year to meet rising demand and offset
declines. If that's accurate, that speaks volumes.
Wow, wow, wow. The market is incredible. Too much stuff going on. Again, only some very quick notes.
Disclaimer: this is not an investment site. Do not make any
investment, financial, job, travel, or relationship decisions based on
what you read here or what you think you may have read here. If this is
important to you, go to the source.
Disclaimer: I make a lot of simple arithmetic errors. I often see things that do not exist; I read quickly and miss important points. Sometimes it takes me days (maybe even weeks) to see where I was wrong.
Biggest energy story of the week (so far): MPC (error corrected; reader noted error; thank you) buying Endeavor. The latter is a refining company. Used to be known as Tesoro. Pacific Northwest look more and more like a loser in the 21st century global economy.
Apple's plan on how it will repatriate its cash hoard of $285
billion to America is expected to be revealed on the May 1 earnings
call.
the company will start buying back even more of its
shares as a first step, analysts say. It's already purchased 22 percent
of its outstanding shares since 2012.
bringing Apple funds back stateside could result in a big boost to the company's dividend.
CAFE: EPA will try to thwart Obama's rules, California's rules on gas mileage. We've talked about this before. Will end up in court. Won't be resolved until after Trump's first (only?) term. Could be argued before the court just as gasoline prices spiking (again). Ford, Gm making strategic decisions now that could be fatal. Or incredibly rewarding.
Honda has "car of the year." Can't sell it to Americans -- don't want it. Americans want SUVs and pickup trucks. Tesla? Has lots and lots of sedans for sale S&3. No pickups yet, and the crossover is not doing well.
Sales of the Accord are down 12% in the first three months of the year
compared with the corresponding period last year, when dealers were
selling the old model. Meanwhile sales of its main competitor,
Toyota Motor
Corp.’s
Camry, are up around 9%. That endangers Honda’s strategy of trying to grab a larger share of the shrinking sedan market and offset its inability to make enough sport-utility vehicles.
Comment: I see why: the Honda Civic competes directly with the Honda Accord, and in that arena, the Civic is better bang for the buck. Counter-intuitive. Disclaimer: I love our Honda Civic.
Quality is not Job #1 for Tesla. If I remember, I will get back to this with a screenshot.
********************************************
Updates
May 2, 2018: chart at original post has been updated based on estimate from an analyst's estimate after the conference call: The analyst's estimate:
The graph:
May 2, 2018: chart at original post has been updated based on information from letter released by Tesla when it released its 1Q18 earnings:
According to the letter:
Cash outflow from operating activities in Q1 2018 was $398 million primarily due to an increase in inventory and accounts
receivable balances as a result of the timing of deliveries. Higher number of Model S and Model X vehicles in transit at the end of
Q1 2018 compared to Q4 2017 had a negative impact of about $120 million on our working capital. Additionally, due to a
substantial increase in our deliveries in the last few days of the quarter, our accounts receivables negatively impacted our
operating cash flow by $169 million in Q1. Both of these factors provided cash inflows during April.
Apparently the company has about $2.5 billion cash on hand, and is burning about $1 billion / quarter.
Original Post
Speaking of Tesla: burns cash, not fuel.Anyone following this story closely is amazed that Musk Melon has not yet announced another capital raise. The company needs $2 to $4 billion. Yesterday. Why has Musk not announced a new capital raise. The twitter folks think that the SEC won't allow the company to issue more common shares -- standard practice when a company is under SEC investigation. Don't know but it certainly makes sense. There's a story out there (if I find it again, I will link it) -- that Tesla doesn't have enough cash on hand to outlast the year (2018). Also, if true about SEC investigation, it explains why CFO, others jumped ship earlier this year.From Bloomberg:
********************************************
Nissan Rogue: speaking of cars, the Nissan Rogue may surprise folks this year.
Relativity: Korean peninsula is "old news" but photo op in June will be top story for the month. But the real story, now? The Mideast. Trump moves at speed of light -- relative to Congress, media, alt-left. The first country Trump visited after taking office -- Saudi Arabia. Saudi is facing an existential crisis. The prince listened carefully to what the Trumps wanted (Jared and Donald). #1 supporter for the Palestinians? Saudi Arabia. Now this: Palestinians need to take what the US offers -- Saudi Crown Prince.
Nobel: SoKo's Moon says Trump deserves the Nobel Peace Prize. The three that will share it -- Kim-Xi Moon. Pies.
Korean summit: listening to NPR this morning, it's very clear the left (not just the alt-left) in our country will do what they can to derail the summit; scuttle success. It will be interesting if Scott Adams picks up on this.
Mideast: everyone is focused on Iran. The story being missed: Palestinians. Trump, Israel and Saudi Arabia seem to be on same page.
Price of oil: forecasts all over the place -- some now saying oil will easily hit $100; could hit $300 (that tweet has been deleted, but a screenshot captured it). Others says price could collapse.
Oil supply / demand; the story for months -- too much supply; now, the story has changed -- too much demand; investors being played by the chatter.
WHCD: will it play in Peoria? Nope. WHCD dead. Lack of civility -- reached new depths. It will be interesting if Scott Adams picks up on this. This is not how you persuade middle-of-the-roaders looking for reasons to vote against Trump.
Auto: environment changing fast. Ford, GM shutting down entire lines of sedans. Tesla is pretty much limited to sedans right now.
Most expensive driving season -- ever? Some are saying so. That may or may not be, but it will be close, and certainly makes no sense. All of a sudden folks are concerned about $68 oil when a) under previous administrations, oil hit $140/bbl or thereabouts; and, b) at one time, it was said that US shale couldn't survive on anything less than $70-oil.
Seems like just about everything to do with energy markets is up these
days. Crude oil prices are back to the levels of late 2014. Crude
production hit a 10.6 MMb/d record volume last week, while lower-48
natural gas has been bouncing around an 80 Bcf/d record level. Exports
of crude, gas and NGLs are at all-time highs. But all those hydrocarbon
molecules must find their way from the wellhead to market.
