Wow, Wow, Wow -- Happy Days Are Here Again -- May 1, 2018

From The Bismarck Tribune:

North Dakota’s oil and gas tax revenues have exceeded expectations so far this budget cycle, prompting tempered optimism from state lawmakers.

Oil and gas tax collections surpassed $1.4 billion through April, 22.8 percent above forecasted totals. That’s due to better-than-anticipated oil production and prices, according to a report sent to state lawmakers Friday.

The report covered the first nine months of the biennium that started in July 2017. Revenue collections reflect oil production and prices from two months prior.

Republican state Sen. Ray Holmberg, chairman of the Senate Appropriations Committee, said legislators were “more conservative” with their forecast. But he also credited a healthy oil industry that propelled unprecedented growth in state revenues just a few years ago.

I assume the pols from from Fargo, West Fargo, and Grand Forks are already looking at ways to spend this revenue.

And more:

Ron Ness, president of the North Dakota Petroleum Council, said oilfield technology has “advanced rapidly,” and he predicted the industry would “likely” exceed the production record of 1.2 million barrels per day in the coming months.

Ron Ness has seldom been wrong when it comes to the oil sector in North Dakota.

Less than a year ago, Moody's downgraded Williston Public School District 1, and the editors at The Atlantic Monthly wrote off the Bakken as a bust. 

 Be happy, don't worry:

Don't Worry, Be Happy, Bobby McFerrin

Random Update Of Three MRO Wells In Bailey Oil Field -- May 1, 2018

I assume I've posted these wells before but don't recall. These are worth re-posting for newbies:

• 29630, 5,644, MRO, Clarice USA 14-9H, Bailey, 45 stages, 8.3 million lbs, t9/17; cum 213K 3/18; -- a 73K month, 9/17;
• 29631, 3,070, MRO, Delia USA 14-9TFH, Bailey, Three Forks B1, 45 stages; 8.1 million lbs, t8/17; cum 11K over 6 days -- extrapolates to 56,385 bbls over a 30-day month; cum 192K 3/18; a 45K-month, 10/17;
• 29634, 4,048, MRO, Double H 34-8TFH, Bailey, Three Forks B1, 45 stages, 8.1 million lbs, t9/17; cum 215K 3/18; a 44K-month, 9/17;

Look at the production profiles:

#29630:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	3-2018	30	14830	14867	9594	10337	72	8544
BAKKEN	2-2018	28	17620	17485	12810	13733	12	11730
BAKKEN	1-2018	18	12927	13117	8912	13402	0	11959
BAKKEN	12-2017	26	23032	22888	16413	25342	266	22526
BAKKEN	11-2017	30	24634	24696	20092	24758	579	21455
BAKKEN	10-2017	29	46789	46837	38169	53838	11	48709
BAKKEN	9-2017	28	73250	72868	0	78220	0	70243

#29631:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	3-2018	16	7822	7956	7240	9453	37	8508
BAKKEN	2-2018	28	14890	15032	14227	12491	10	10796
BAKKEN	1-2018	31	25558	25631	25449	30575	0	27687
BAKKEN	12-2017	27	28748	28556	24764	28770	389	25178
BAKKEN	11-2017	30	29661	29651	29160	34568	823	30447
BAKKEN	10-2017	31	44560	44398	42307	51843	10	46958
BAKKEN	9-2017	20	29946	30706	29665	29516	0	26264
BAKKEN	8-2017	6	11277	10361	0	13212	0	11965

#29634:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	3-2018	30	17981	18002	18065	27267	5720	19396
BAKKEN	2-2018	28	22690	22840	17201	34461	8568	23180
BAKKEN	1-2018	31	36728	36854	34783	48218	12642	31742
BAKKEN	12-2017	27	29520	29192	25044	28452	10151	16010
BAKKEN	11-2017	25	24310	24329	31887	21525	8123	11158
BAKKEN	10-2017	31	40114	40444	39575	45064	147	40479
BAKKEN	9-2017	23	43939	43192	2136	42597	2	37738

Random Update Of A WPX Well With A Nice Jump In Production -- May 1, 2018

I've been following this well for quite some time.

• 19973, 141, WPX. Wolf 27-34H, Squaw Creek, t7/11; cum 275K 3/18; 

I first got interested in this well on September 17, 2017, and then continued to follow it, and posted updates:

• September 17, 2017: #19973, neighboring wells fracked 6/17; this well taken off-line 6/17; WPX, Rachel Wolf, Squaw Creek; updated October 19, 2017; huge wells; halo effect. See how long halo affect lasts. Still obvious 12/17; looks like halo effect still as of 1/18 - but only 11 days of production in 1/18; only 10 days in 2/18;

But now, 3/18, back up to 10,269 bbls in one month:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	3-2018	31	10269	10546	6137	17838	12699	3417
BAKKEN	2-2018	10	2667	2561	1441	4633	1164	3001
BAKKEN	1-2018	11	3724	3658	1855	6480	607	5352
BAKKEN	12-2017	31	6820	6601	6417	11848	5254	5231
BAKKEN	11-2017	30	6405	6442	7452	11124	5747	4080
BAKKEN	10-2017	31	8714	8708	9157	15136	7997	5574
BAKKEN	9-2017	30	8504	8631	13802	14771	7696	5553
BAKKEN	8-2017	20	3026	2901	10314	5256	2736	1948
BAKKEN	7-2017	1	2	0	1	4	0	4
BAKKEN	6-2017	20	891	958	417	1548	1013	121
BAKKEN	5-2017	31	1376	1307	639	2389	1467	151

Closing Out The Month Of April, 2018 -- May 1, 2018

The Nave Photon must be getting very close to its China destination. Its last location was dated April 24, 2018, and it was in the South China Sea.

Track the Nave Photon here.

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Tesla's 2025 Non-Callable Bonds

Link here.

Back down to $88.

This link: Tesla, 2025 bond; coupon rate, 5.3%; 7 years to maturity; quarterly payment interval:

• yield to maturity: 8.54%
• current yield: 6.67%

Huge thanks to Don for sending me the link to the "bond calculator."
 

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

Trans Mountain: Today's Update

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

Licorice

Best licorice: Gimbal's "Scottie Dogs."

Just saying. 

And can only be found on-line and at Walmart.

"Awful" -- May 1, 2018

I was surprised to see the numbers so soon; the numbers usually start showing up two or three days into the new month, but here they are:

Some are suggesting the Tesla Model 3 numbers are "awful."

My understanding is that April is one of the worse months for auto sales, but that is not true for Tesla. These cars were ordered months -- sometimes years -- in advance, and this has nothing to do with "sales in April." This has to do with deliveries and production in the preceding month.

Because April is the worst month for auto sales, we can ignore the numbers for the other manufacturers and wait until next month's number. But for Tesla -- nope -- it's all about production and deliveries. These cars have been ordered months (and sometimes, years) ago.

And when one understands that, yes, these are awful numbers -- for all three Model 3; Model S; and, Model X.

I think the numbers are awful, but others may have a different opinion.

We'll know more tomorrow when 1Q18 earnings are reported.

Good luck to all.

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.

Natural Gas Liquids Pipeline Approved For North Dakota -- May 1, 2018

Data points from The Bismarck Tribune:

• Oneok
• Cherry Creek Pipeline project
• the conversion of natural gas gathering lines into a natural gas liquids transmission pipeline
• about 45 miles of pipeline conversion
• only $1.8 million; will involve very little construction
• capacity: 50,000 bbls of natural gas liquids (NGLs) from the Lonesome Creek gas processing plant in McKenzie County to the Stateline gas processing plant in Williams County
• will deliver NGLs into the Bakken Pipeline

ND NGLs:

• currently, more than 400,000 bpd
• of that, 40,000 to 60,000 bpd transported by rail due to pipeline shortage
• by 2035: North Dakota NGL production is expected to come close to one million bpd
• since it runs under the Missouri River, it will require a US Army Corps of Engineers permit revision

Also:

• Oneok is developing the Elk Creek Pipeline
• a 900-mile pipeline for NGLs
• will transport NGLs from Sidney, MT, to Bushton, KS
• the pipeline begins in Sidney, MT, but transports Bakken NGLs
• scheduled for completion by 4Q19

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

NGLs

From the "FAQ Page," regarding NGLs:

58. Oil is generally "measured" in barrels (bbls). Is the volume of natural gas liquid (NGL) ("wet" natural gas) also expressed in bbls? No, NGLs are generally expressed in gallons, according to a comment sent in by a chemical engineer.  Incidentally, some think the "additional" "b" comes from "blue barrels." From RBN Energy:

There’s one more aspect of NGL markets that must have been designed to confuse outsiders, because it certainly does.  NGL quantities are quoted in barrels.  NGL prices are quoted in gallons.  Really.  So I’ll sell you 10,000 barrels of non-TET normal butane for $1.36 per gallon.  It never occurs to NGL people to convert either the quantity to gallons or the price to a per barrel number.  They think of everything multiplied by or divided by 42.  Go figure.  And BTW, propane retail people do think in gallons - but that’s another story.

59. What is meant by natural gas liquids? RBN provides a great primer on natural gas liquids, or wet natural gas. Briefly: Natural Gasoline  - C5s; Normal Butane – NC4, Isobutane  - IC4. From the linked RBN post:

NGLs are sometimes referred to by the number of carbon atoms in their molecules.   Yes, even traders with no engineering background do this.  It makes you part of the secret NGL society.  Ethane’s chemical formula is C2H6, meaning that it has two carbon atoms and 6 hydrogen atoms, and in the market it is called C2.  Propane’s formula is C3H8, and it is called C3.  Butanes are a little more complicated and it is best that we not get into the molecular chemistry here to explain it (for me and for you).  Suffice to say that normal butane is called NC4 and isobutane IC4.  Finally natural gasoline is called C5 (even though natural gasoline contains C5 plus a lot of C6 and greater).   The more carbon atoms in a hydrocarbon molecule, the heavier it is.  So in the market, butanes and natural gasoline are called  ‘heavies’ or ‘heavy ends’.  Ethane and propane are  ‘lights’ or ‘light ends’.   Using these semi-technical terms keep others from understanding what NGL people are talking about, which of course is the objective.

59a. Butane, one of the two natural gas liquids that is also known as LPG (liquefied petroleum gas; the other being propane). In the U.S. context, we are generally referring to normal butane, that product used in U.S. markets primarily as a motor gasoline blending component, and to a much lesser extent as a petrochemical feedstock.

59b. How much NGL is North Dakota producing? A lot. 400,000 bpd in 2018; expected to increase to about 1 million bpd by 2035. See this post.

CLR Has Permits For A 12-Well Pad In Banks Oil Field -- May 1, 2018

API: a huge build -- an increase of 3.427 million bbls; oilprice.com headline: "oil crumbles as API reports large crude build." In fact, WTI is stable, up slightly. It gets tedious -- the headlines over at oilprice.com are written in anticipation of "what should happen" based on the data. No, I did not read the story.

EIA weekly data: to be reported tomorrow morning, 9:30 CDT.

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

Back to the Bakken

Active rigs:

$67.47→	5/1/2018	05/01/2017	05/01/2016	05/01/2015	05/01/2014
Active Rigs	60	49	29	86	187

Twelve new permits:

• Operator: CLR
• Field: Banks (McKenzie)
• Comments: CLR has permits for a 12-well Patterson/Pittsburgh/Kuhn/Uhlman pad in lot 4 section 7-152-99; at about 1,200 feet FSL and 100 - 1,000 FWL, lot 4 looks like it is in the southwest quarter of the section (see below).

Two permits were canceled: XTO canceled two Myrna permit in Williams County

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

The well:

• 28737, 1,423, CLR, Uhlman 1-7H, Banks, t1/15; cum 512K boe 3/18; no evidence this well has been re-fracked (no sundry form; FracFocus):

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	3-2018	19	2939	2473	4693	3998	3826	38
BAKKEN	2-2018	23	3491	3681	5708	6194	136	5881
BAKKEN	1-2018	22	3552	3173	9364	7376	0	7202
BAKKEN	12-2017	0	0	0	0	0	0	0
BAKKEN	11-2017	2	4	205	0	0	0	0
BAKKEN	10-2017	31	2859	3207	1601	5946	5779	39
BAKKEN	9-2017	29	5515	5402	3730	12322	11670	434
BAKKEN	8-2017	31	6631	6543	3935	14745	14468	31
BAKKEN	7-2017	31	6454	6195	4002	12385	11844	300
BAKKEN	6-2017	30	5715	5794	3760	11133	10570	340

Apple Smashes Estimates -- May 1, 2018

Updates

May 2, 2018: Apple's 1Q18 profits -- just this one quarter -- was greater than total profit generated by Amazon over ten years.

Biggest threat to Apple: Amazon. Alexa kicking Siri's butt. "Hey, Siri."

Original Post

Analysts and discussion on CNBC immediately after release: lukewarm; ho-hum.

What everyone is missing: how the discussion would have gone had Apple reported earnings "in-line."

Worse: what everyone is missing -- how the discussion would have gone had Apple missed earnings by one penny -- although that would have given us a buying opportunity.

16% increase in quarterly dividend.

Buyback: $100 billion stock buyback.

AAPL shares surge after-hours -- up $8 in after-hours trading, almost up 5% in after-hours trading.

Links, stories to follow. First link, minutes after Apple releases earnings.

Beats on top and bottom lines.

Margins: 38%.

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.

Immediately after the earnings released, CNBC talking head: "the beat was not all that great." Wow. What a doofus.

The analyst needs to look at what "bears" were suggesting. Not only did they do better than what the "bears" were suggesting, the numbers were much better than expected.

January 20, 2018, my "back-of-the-cocktail-napkin" numbers. Special dividend did not occur, but stock buyback of $100 billion is greater than the $71 billion forecast.

Current dividend: $2.52 x 1.16 = $2.92 dividend going forward.  To 73 cents quarterly (yup, exactly right -- $2.92, annual).

iPhone X a huge success and some analysts thought iPhone X sales were so bad the line was going to be discontinued.

EPS: $2.73 vs estimate of $2.67.

Revenue: $61.14 billion vs estimate of $60.82 billion.

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

Finally, a talking head on CNBC is really, really impressed with the numbers.

Next analyst: A "good" quarter but buyers can wait; too many unknowns; feels he can get it cheaper -- this analyst simply does not get it. He probably can get it cheaper. But it was more than a "good" quarter.

Amazing what folks will pay for TSLA and then diss AAPL. LOL.

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

Earnings transcript here.

WLL: Let's Look At The Slides -- May 1, 2018

Updates

Later, 5:45 p.m. CDT: see first comment --

At the very end of Whiting's conference call, a question came up about EOR.

The executives kind of sidestepped the issue, but did indicate that Whiting is definitely evaluating the concept alongside current operations.

The CEO then chimed in with a comment regarding present recovery rate is not especially high.

EOR for the shales is probably a few years off, but I suspect it will boost recovery significantly. 

Original Post

WLL: holy mackerel -- with EPS of 92 cents by 67 cents.

Let's look at the slides, for 1Q18 (compare history of WLL at this post):

• average production: 127,000 boe -- above midpoint of guidance
• adjusted earnings of 92 cents/share
• net cash exceeded CAPEX by $46 million
• discretionary flow exceeded CAPEX by $103 million
• DD&A per boe "significantly" below low end of guidance
• Williston Basin to grow 14% from 4Q17 to 4Q18
• to drill 120 wells in the Williston Basin
• Williston Basin 
• CAPEX: $600 million
• net acres
• tier 1: 239,606 acres; 1,122 net wells
• tier 2: 169,987 acres; 1,680 net wells
• grand total: 409,593 net acres
• 4 rig program; 5th rig end of April
• 2 - 4 completion crews
• targeting 1 million boe EUR wells
• well costs: $6.5 to $7.1 million 
• locations
• Hidden Bench enhanced completions outperforming a million boe type curve
• Polar enhanced completions outperforming a million boe type curve
• Sanish enhanced completions outperforming a million boe type curve
• optimized completions
• 600 - 1,200 lbs/ft proppant
• 200' - 300' stage spacing
• 15 - 40 bbl/ft fluid
• 30'- 50' cluster spacing
• all cemented liner plug & perf (PnP)
• strategy
• large geometry completions for infill wells in DSUs with high remaining recoveveable oil in place ("halo effect")
• near-wellbore completions for DSUs with high parent well count ("halo effect")
• optimum completions
• less than 3 million lbs: underperformers
• better production going to 7.5 million lbs
• > 15 million lbs: no apparent improvement

Here We Go! The Market, Energy, And Political Page, Part 3, T+62 -- May 1, 2018

Updates

Later, 12:52 p.m. CDT: see first comment, ".... without historical parallel."

Original Post

Well, that didn't take long. All that hand-wringing about the problems and travails of the Permian. Here we go. From Mike Fitzsimmons over at SeekingAlpha:

• the Gray Oak Pipeline; Philliops 66 Partners
• pipeline could transport up to 1 million bpd from the Permian to the Gulf Coast
• meantime, WTI in Midland was recently trading about $9/bbl below Gulf Coast crude
• first open season was heavily subscribed and there will now be a second binding open season
• the pipeline will terminate at multiple Gulf Coast markets, including a marine terminal connection in Corpus Christi for the export market

Last week Phillips 66 Partners (PSXP) announced the open season for its proposed Gray Oak pipeline had received enough volume commitments to proceed with a second open season. The ultimate capacity of the pipeline is dependent on the outcome of the second open season. If fully subscribed, the pipeline's capacity could ultimately be expanded to 1 million bpd.

And it just gets better, for those connecting the dogs:

The Gray Oak Pipeline is a joint venture: 75% owned by Phillips 66 Partners and 25% by Andeavor (ANDV) which is likely to merge with Marathon Petroleum (MPC).

Enbridge has an option to acquire up to a 32.75% interest in the joint venture. If all options are exercised, which is likely considering ENB's very important Line 3 challenges in Minnesota, Phillips 66 Partners’ ownership would be 42.25% and Andeavor’s ownership would remain 25%.

It is no coincidence Marathon's offer for Andeavor came after the announcement of Gray Oak's second open season and the same day announcement by Buckeye Partners to develop a new deep water marine terminal at the mouth of Corpus Christi Bay.

The terminal will be operated by Buckeye and will initially have 3.4 million barrels of storage. Most importantly, the terminal will have two deepwater ports capable of servicing very large crude carriers, or VLCC's, for the global export market. BPL owns 50% of the terminal and be the operator. Phillips 66 Partners and Andeavor will each own a 25% stake.

So, while the US Pacific Northwest bans rail movements; the Californians ban fracking; and the New Englanders ban pipelines, Texas just keeps rolling along. 

Wow.

But the big story line: the gap between the US and the rest of the world when it comes to energy continues to widen -- at lightning speed.

Exhibit A:

The Market, Energy, And Political Page, Part 2, T+62 -- May 1, 2018; North Dakota #1 In Wheat, But Minneapolis Took The Profits

The Bakken vs Texas: The Houston Chronicle has a great op-ed regarding the Bakken -- "North Dakota struck oil, but Houston took the profits." A huge "thank you" to the reader who sent me the link. My reply:

The writer/op-ed probably captured the Bakken vs Texas exactly right. The question is whether "it" could have been any different. I really don't think so. 

And, oh, by the way, this story has not yet played out. There are still many more chapters to be written.

By the way, in the print media, the gravitas of an article is defined by a) where it is published; and, b) the length of the article. This is a very, very long op-ed.

One more thing: the reader made a great analogy regarding oil, North Dakota, and Texas: the very same thing occurred with regard to farming  -- North Dakota leads the nation in so many varieties of wheat production but Minneapolis took the profits: farming (wheat), North Dakota, and the Minneapolis milling industry.

Brilliant. And that's why I love to blog. Everyone comes up with "stuff" I never even thought of.

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

Trump and Korea

Scott Adams: When Scott Adams is good, he is very, very good. When he is bad ...

Scott really, really has a great commentary today over on Twitter -- and it's very short -- a 4-minute monologue regarding "where" Trump wants the Korean-US summit to be held.

Trump has floated the idea of holding the summit on the DMZ. Scott explains why. Brilliant.

Bottom line: Scott says Trump would never float the idea of a summit on the DMZ unless the deal was already done.

• if the summit is held in Switzerland: they are still negoiating
• if the summit is held in the DMZ: they are ready to celebrate that the deal has been done

Scott says Trump is not going to show up to negotiate; he is going to a Korean summit to celebrate.

That's why it is taking so long to decide where the summit will be held: we don't know whether we are talking about negotiations or a celebration. 

Think about it, would Trump even float the idea of a summit at the DMZ if it was not all about a celebration? Wink, wink.

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

Statoil: EPS of 45 cents vs 40 cents forecast; improved almost 30% from year earlier. Revenues surged and handily beat forecasts.

British Columbia. Blogging about the Trans Mountain pipeline project and the tiff between Alberta and British Columbia brought a fair amount of input/insight from one reader. It's really more than I can put on the blog -- it would open up too many discussions beyond the Bakken ... I have enough trouble as it is without getting even more distracted. Having said that, I have a better appreciation of the situation on the ground:

• "the BC culture" is very, very different from "the Alberta culture"
• Alberta: the Bakken; the Permian, west Texas,
• British Columbia: London's Chelsea or Kensington districts

• Comment: that's not going to change, and it really makes the  Trans Mountain pipeline project unlikely. 

Ford: April sales. Data here.

• Ford unit sales -4.7% to 204,651 to match the forecast from Edmunds. Retail sales were down 2.6% Y/Y during the month to 137,049 units
• passenger car sales -15% to 42,373 units
• SUV sales -4.6% to 69,940 units
• truck sales +0.9% to 92,338 units. F-Series sales +3.5% to 73,104 units
• the company ended the month with dealer stock of 579,699 units or 68 days' supply vs. 66 days' supply at the end of March

Someone made this comment at this link:

Simply masks the fact that F has written its end as a manufacturer by abandoning autos.

They'll morph into a non-manufacturer, marketing all imports and mostly Chinese made autos in 15 years or so.

After that, as Chinese nameplates angle to capture the middleman profit, F will disappear.

This is what happened to all mass market US electronics companies and will happen to all US large manufacturers in every industry.

F had to decide whether to retain engineering and manufacturing skill or turn into a financial engineering company, and they chose the latter. It's exactly the decision the country made as a whole back in the 90s, and here we are careening toward bankruptcy and a nation of musicians, social justice warriors, and paper pushers, with a mass of unemployed working class.

Fast And Furious -- US Crude Oil Production -- May 1, 2018 -- US Renewable Energy Incentives Drop Almost 60% Over Last Four Years

This is quite fascinating. A reader has put into perspective just how fast US crude oil production is growing -- look at this post from yesterday -- note that the US has set new weekly crude oil production records for the last twelve weeks out of thirteen.

The reader noted that at this pace of production growth, the US will 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 ...

Or another way to put that into perspective: that would be like the Dallas Cowboys winning twelve regular season games in thirteen weeks.

An interesting question to ask: had there not been a US shale oil revolution, would the price of oil have stimulated US off-shore oil production to the point that the US would now be seeing this type of production.

I don't know, and I don't know if the question can be satisfactorily answered.

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The Market, Energy, and Political Page, T+62

API US crude oil inventories: pending; 3:30 p.m. CDT today.

AAPL earnings: after market close today

US renewable energy incentives plunge: from oilprice.com --

Total renewable-related federal subsidies in the United States dropped to $6.7 billion in financial year 2016 from $15.5 billion in 2013.

Subsidies for renewable energy, including biofuels, accounted for between 42 percent and 52 percent of total federal energy subsidies in each of the years 2013 through 2016.

Tax and direct expenditures combined accounted for around 93 percent of all federal renewable-related subsidies for each of the years analyzed. In FY 2016, tax expenditures alone accounted for 80 percent of total renewable energy subsidies.

Comment: see article to see how little US incentives actually went to R&D. Incentives for renewable energy were almost 100% related to tax incentives. On the other hand, the fossil fuel sector received non-tax incentives (like university research grants).

Between fiscal years 2013 and 2016, direct federal financial interventions and subsidies in U.S. energy markets almost halved, from $29 billion in FY 2013 to $15 billion in FY 2016.

U.S. federal subsidy support for fossil fuels plunged from nearly $4 billion in 2013 to $489 million in 2016.

Road to Germany: note the renewable energy incentives story above --  total renewable-related federal subsidies in the United States dropped to $6.7 billion in financial year 2016 from $15.5 billion in 2013. That represents about a 57% drop in renewable energy incentives. The political environment suggests this is not likely to change over the next couple of years.

Now, what happened in Germany when renewable energy incentives plunged? See this post.

After the German government decided to reduce subsidies to the solar industry in 2012, the industry nose-dived. By this year, virtually every major German solar producer had gone under as new capacity declined by 90 per cent and new investment by 92 per cent. Some 80,000 workers — 70 per cent of the solar workforce — lost their jobs. Solar power’s market share is shrinking and solar panels, having outlived their usefulness, are being retired without being replaced.Wind power faces a similar fate.

Germany has some 29,000 wind turbines, almost all of which have been benefitting (sic) from a 20-year subsidy program that began in 2000.

Starting in 2020, when subsidies run out for some 5,700 wind turbines, thousands of them each year will lose government support, making the continued operation of most of them uneconomic based on current market prices.

2013: and then look at this  -- this is the most-viewed page when searching "Germany" on the blog --
Germany looking to stop wind energy initiatives sooner than later -- Bloomberg; wind energy has killed Germany's manufacturing base.

May Day! 2018

TSLA-MPC-Andeavor: from The Financial Times -- the deal challenges Tesla's electric dreams. California seen as needing steady source of petrol and diesel long into the future. 

If Elon Musk believes the adage that “as California goes, so goes the nation”, then the founder of Palo Alto-based Tesla may have cast a weather eye over the mega-deal between Marathon Petroleum and Andeavor. 

The $36bn transaction, the 11th largest in oil market history, will turn Marathon into the biggest oil processor in the US once it absorbs Andeavor’s fleet of largely West Coast-based refineries. 

But it comes at a time when Mr Musk and his contemporaries are trying to remake the Golden State as a test bed for an electric vehicle future, with the aim of relegating the internal combustion engine and its reliance on fossil fuels to an afterthought behind long-range batteries. 

California already had six EVs per 1,000 people in 2016, a ratio that will have risen since then, compared with just 0.7 in Texas.

The Marathon-Andeavor deal represents a wager against some of the loftier claims of Mr Musk’s vision with “old economy” companies still believing they have a thing or two to teach the tech stars of Silicon Valley about oil’s future.

California will continue to need a steady source of petrol and diesel long into the future with cars accounting for only a third of oil demand globally.

Freight, petrochemicals, aviation and shipping comprise the rest and will not be so easily electrified. “It’s essentially a bet, in part, that the Californian market will not electrify as easily as the politics and culture of the state might suggest,” says Alan Gelder, head of refining at energy consultancy Wood Mackenzie.

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.

Dividends: corporations boosting dividends. Exxon raised its quarterly dividend by 7%, from 77 cents to 82 cents.

Apple: pending. Expectations that Apple will make some interesting announcements during its earnings call, probably tomorrow. Apple's earnings will be released after market close today.

Iran sanctions decision: less than two weeks for Trump's decision. Trump likes to negotiate; doesn't like to rip up documents or delay the process. John Bolton is now his SecState. Bibi releases 100,000 "verified" documents.

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Back to the Bakken

Where Frackers Are Always Welcome 

Active rigs:

$67.92↓	5/1/2018	05/01/2017	05/01/2016	05/01/2015	05/01/2014
Active Rigs	61	49	29	86	187

RBN Energy: Canadian and US Northeast (Marcellus/Utica) natural gas suppliers battle for midwest market share.

For years, the U.S. Midwest has been a perennial net exporter of natural gas to Eastern Canada. But with Marcellus/Utica and Canadian gas supplies barraging the region, that’s changing. Less Midwest gas is flowing across the border into Ontario. At the same time, Canadian gas supply that used to serve U.S. Northeast demand is being displaced to the Midwest. That’s on top of Marcellus/Utica gas that’s physically moving to the Midwest via new capacity on the Rockies Express and Rover pipelines. The result is that the Midwest’s net exports to Canada are declining and even flipping into net imports during some summer months when the market is in storage injection mode. Thus far, this reshuffling of supply has occurred at the expense of Gulf and Midcontinent gas that historically has served the Midwest. But now there’s little of that left to displace from the Midwest, even as still more supply is expected to move there. Canadian producers are banking on capturing more of the Midwest market, as are Northeast producers via expansions like Rover’s Phase II and NEXUS. In other words, there’s a fierce battle brewing for Midwest market share. Today, we look at flow dynamics and factors affecting Canadian gas flows to the U.S. Midwest.

Earlier this year, we began a series examining Canada’s gas exports to the U.S. by region. These gas flows play a key role in the U.S. natural gas supply-demand balance, but have been in flux in recent years due to increasing competition from gas-producing basins in the U.S. We started by looking at the macro fundamentals affecting the Canadian gas supply-demand balance, including growing gas production from the Montney and Duvernay shale plays in Alberta and British Columbia. While Canada’s gas demand is also rising — for gas-fired power generation and to supply steam and power for oil sands production — exports remain a necessary demand source for Canadian producers. However, the problem is that the U.S. needs less and less of that Canadian gas.