Wednesday, January 23, 2019

ISO New England -- EIA Is Following Also -- January 23, 2019

They must be reading the blog.

I'm not the only one following ISO New England closely. This, from the EIA, just popped up on twitter.

ISO New England electricity production will fall short of demand:
  • demand: 15,500 MWh
  • net generation: 13,935 MWh
  • 13,935 / 15,500 = 90%
  • net generation falls short by 10%
  • imports will make up the difference
  • this doesn't tell the whole story because New England imports natural gas, also
  • more nuclear energy scheduled to come off line over the next couple of years
The graphic:

Signing Off For The Night -- January 23, 2019

I'm done blogging for the day. I'm burned out. It doesn't happen often that I feel burned out but this is one of those nights. I don't know why. It just feels like I hit a brick wall.

Two things before I sign off for the night.

First, this graphic from twitter today.

Second, we may be entering a period in which things become very confusing to Americans. It is very possible that the glut of WTI will continue, dropping the price of WTI.

Americans will see that headline that there is a glut of oil, but they will see the price of gasoline rising.

Due to world events, the refiners are now desperately trying to source heavy oil to balance all that light oil for their refineries optimized for heavy oil. Refiners will be forced increase the price of their refined product as heavy oil becomes more expensive, and yet there will be that glut of WTI.

Obviously there are many, many other story lines but that certainly seems most plausible.

If that comes to pass, we can all thank President Obama for killing the Keystone XL which would have completely prevented this problem -- the Keystone XL was designed to bring heavy oil from Canada to the Gulf Coast.

Having said that, Canada currently has a curb on heavy sands production. I assume that the curb will be lifted soon and we will start to see increased CBR from Canada. It should be noted that despite the Keystone XL being killed, the Canadians seemed to be able to ship all the oil they produced via rail so the death of the Keystone XL may not be that big a factor.

The desperate need for heavy oil also puts Saudi Arabia back in the catbird seat, as they say. I'm not sure if Saudi oil is as good as that from Venezuela or Canada but it's heavier than WTI. So we'll see.

All things being equal, I see WTI falling in price (unless it follows the overall oil market and rises with "heavy oil") and gasoline becoming more expensive.

Complicating things, the refiners will soon go into their switch from winter blends to summer blends (always increases the price of gasoline). And, then we anticipate the driving season. All in all, I suspect WTI will struggle and remain in the $45 to $55 range; Brent will increase; and gasoline prices will rise significantly.

Disclaimer: this is not an investment site. Do not make any investment, financial, job, travel, or relationship decisions based on anything you read here or think you may have read here.

Seven New Permits -- January 23, 2019 -- At The National Level, Huge Crude Oil Build Reported By API

API weekly crude oil inventories: surprise, surprise, another build -- but look at the size of this build -- 6.55 million bbls;
  • expectations - a small draw of 42,000 bbls 
  • I love that "precision" -- 450 million bbls in storage (give or take a few million bbls) and analysts came up with a 42,000-bbl draw -- 42,000/450,000,000 = a nine with four zeroes in front of it before getting to the decimal point -- the AGW crowd would be pleased
  • We'll have to wait until tomorrow morning to see what the EIA says
EIA confirms: US crude oil inventories surge by a whopping 8 million bbls

WTI: despite this massive build, WTI? Flat.

Back to the Bakken

Wells coming off the confidential list today:
Wednesday, January 23, 2019
  • 34197, 2,086, CLR, Norway 9-5H2, Fancy Buttes, t11/18; cum 10K 11/18; 
  • 33643, IA/n/d, CLR, Ransom 5-20H2, 33-053-08052, 8.7 million gallons water, 90.1% water by mass; Elidah, t--; cum --;  
Tuesday, January 22, 2019
  • 34879, 1,066, Newfield, Berg Federal 149-97-30-31-4H, 33-053-08527, 9.8 million gallons water; 92% water by mass;Haystack Butte, t11/18; cum 13K after 17 days;
  • 34878, 734, Newfield, Berg Federal 149-97-30-31-5H, Haystack Butte, t11/18; cum 9K after 16 days; 
  • 34613, SI/NC, WPX, Benson 3HC, 33-053-08425, no frack data at FracFocus as of 11/18; Squaw Creek, no production data, 
  • 34476, 386, Lime Rock Resources, Laura Sadowsky 2-1-36H-142-96, 33-025-03437, 9.1 million gallons, 92.9% water by mass; Manning, t7/18; cum 42K 11/18;
  • 34475, 389, Lime Rock Resources, Laura Sadowsky 3-1-36H-142-96, Manning, t7/18; cum 47K 11/18;
  • 23939, drl, XTO, FBIR Ironwoman 21X-10E, Heart Butte,
Active rigs:

Active Rigs63573847157

Seven new permits:
  • Operators: Equinor (4): EOG (2); Slawson
  • Fields: Bull Butte (Williams); Parshall (Mountrail); Big Bend (Mountrail)
  • Comments: Slawson has a permit for a Moray Federal well in 21-151-92; EOG has permits for a 2-well Austin pad in section 9-154-90; and Equinor has permits for a 4-well Sam pad in 30-156-102 (Bull Butte)
Three permits renewed:
  • BTA: a 20002 Agate permit in Golden Valley County
  • Crescent Point Energy: a CPEUSC Lowe permit in Williams County
  • Lime Rock Resources: a Schneider permit in Dunn County
One permit canceled:
  • EOG: a Clarks Creek permit in McKenzie County

Tick, Tick, Tick -- Maduro On The Brink? Drudge Banner -- January 23, 2019


Later, 12:34 p.m. Central Time: why I love to blog. Earlier today I posted the note below about Venezuela -- foreshadowing what I thought was going to be a breaking story soon. Now this from a very, very good source over at twitter. The source has an unusual hash-tag and an interesting way of "crowd-sourcing" a hashtag. I use that same hashtag when tweeting about the Bakken, #OOTT:
This is big.

Trump recognises Venezuela opposition leader Guaido as interim leader, says will use "full weight of US economic and diplomatic power" to pursue restoration of Venezuelan democracy.
Comment: you may remember Guaido from some years ago:

Comment: how long would it have taken a cautious politician to have made this decision. I think that another president might have made at least a dozen speeches on the situation and might have waited six months to a year to see how things played out before going bigley.
Next: sanctions on Venezuela. Do you think the White House is in contact with the CIA?
Chaos: for a White House that everyone says is so disorganized, it certainly seems to run "good enough." 
SOTU: at the same time, the president has told he will keep the "contract." Pelosi invited him to give the SOTU address in early January; she did not specifically deny him from coming to Congress; she just recommended that due to safety concerns, he should not come to Congress. Trump says "a contract is a contract" and the "contract" was Pelosi's letter inviting him. Doesn't sound like a disorganized White House at all.
Disorganized? Same day as all this is happening, it's easy to forget that the first story of the day is that the White House has nominated 51 for judges. That story was the headline story earlier this morning; it's not even on the front page any more.
Original Post
Road-to-Venezuela, tag here. Maduro on the brink? -- Drudge Report headline banner. Apparently if the UN won't step in to settle human rights issues, US VP Pence will. Amazing what the CIA can do when asked nicely. Trump simply mentioned in passing, "sanctions on Venezuela." Within days, the Drudge banner: "Maduro on the brink?"

Road-to-Germany: from oilprice --
The planned closure of all nuclear reactors in Germany by 2022 means that Germany needs to retain half of its coal-fired power generation until 2030 to offset the nuclear phase-out.
Germany ordered the immediate shutdown of eight of its 17 reactors in the wake of the Fukushima disaster in Japan, and plans to phase out nuclear power plants by 2022.
The phasing out of all nuclear power in Germany means that Europe’s largest economy needs to keep half of its coal-fired generation for another decade and possibly extend the deadline for completely phasing out coal.
“No other country getting out of coal is also getting out of nuclear power,” [according to a spokesperson].
Road-to-2020: there was a snippet somewhere today suggesting that Kamala Harris was filling her FTEs with Hillary staffers. If accurate that speaks volumes. Several factoids:
  • Kamala Harris hiring Hillary staffers
  • CNN has "gone with" Kamala
  • Hillary has not been heard from for several weeks; amazingly, almost nothing during the government shutdown; no photo ops (of course, she has flip-flopped on this issue so often, probably doesn't have more to say)
  • although we don't know yet, but it appears that the "evenings with Bill and Hill" tour will be a huge failure; the Houston event was postponed due to the death of Bush I; the next date is April 11, 2019, NYC
Road-to-amnesty: It looks like I'm wrong. I thought the narrative would move from "the wall" to "right-sizing the government" but it now appears the far right could lose big time. There is talk of "the wall" morphing to "all-out amnesty." In exchange for "the wall," Jared and team are willing to consider green cards for DACA/dreamers. It's the right thing to do but only if the wall is secure and laws are changed regarding "one foot on US soil" and "anchor babies." Waiting for Ann Coulter. 

As Expected, Huge Drop In Legacy Fund January, 2019, Deposits

The Legacy Fund is tracked here.

As bad as it was, the January, 2019, deposit still exceeded the average deposit for four (almost five) of the previous eight years.


Random Update On Construction In North Texas -- January 23, 2019


Later, 10:18 a.m. Central TimeSee link at first comment below. The narrator at that video does a really, really good jub, but "we" don't think of these as "bad roads" but really, really "good ideas."  The feeder roads are awesome and a little sporty; not having fences is really, really cool and are really quite important (counterintuitive?). Beltways around the cities are very, very clever; I first saw them in San Antonio. Not exactly sure how beltways have made floods worse. Urbanization made floods worse, but it wasn't the beltways. Population growth was made possible by Texas' transportation system? Austin took just the opposite tack: did not expand its transportation system like the rest of Texas. The city continued to grow and now has one of the worse transportation problems. But the video is really, really good -- gives a great overview of Texas highways. Once you figure them out, they are clearly the best in the nation.

Original Post

I've talked often of all the construction going on north of DFW airport, between Grapevine, TX, and on up to Carrollton, Plano, Frisco, McKinney. All of a sudden I'm seeing a huge project being developed along Texas Highway 121 between Grapevine's historic downtown and the airport (DFW). I know we are getting a new water park but this looks like a much bigger project and it's not quite in the spot I expected. So I asked the old-timers I run into at Starbucks.

I've been told that Grapevine is going to get a 5-level interchange.

Wiki has a page devoted to "stack interchanges." In the local area, the most famous is the "High-Five" north of Dallas on Texas Highway 75. This was the first of "several proposed 5-level interchanges" for the DFW area. Another one is the "Mixmaster" north of downtown Ft Worth. I don't know what is meant by "several," but I assume about five to seven. I think there are currently either three or four 5-level interchanges currently completed in the Dallas-Ft Worth area.

What intrigues me is this: at the wiki page on "stack interchanges," there is a whole subsection on Texas stacked interchanges.

In the screenshot above, this existing 5-level stacked interchange north of downtown Dallas.

Here is an artist's rendering of the new 5-level stacked interchange proposed for Grapevine, TX, just a mile or so northeast of where I live. Note the wide, long canal: this will be the "Lazy River" inner tube ride for the new water park. The first phase will stretch from Houston to Grapevine (Dallas). The second phase will take the "Lazy River" all the way to Amarillo.

January 23, 2019, T+21, Day 33 Of The Government Shutdown, Part 1

Where Americans are getting their AGW updates: from a 29-year-old bartender/NY congressional representative. I was mistaken. I thought she was a former waitress. But no, she was a bartender. I stand corrected. She is over-qualified for the US Congress.

Meanwhile, while the US House is pre-occupied with the inanities of Occasional Cortex, the US Senate will move ahead with confirmation hearings for 51 Trump judicial picks.

Meanwhile, "everyone" says that neither bill in the US Senate will pass which would end the partial government shutdown. The Democrat bill which does not include funding for the wall will not pass the US Senate (that's a given), nor will the Republican bill which does include funding for the wall. The former would provide funding only through February 8, 2019. The latter is a "permanent" end of the partial government closure and would extend the "DACA deadline" which is March 5, 2019.
DACA’s end really started on September 5, 2017, when the Trump administration stopped accepting new applications for the program. From October to March, approximately 122 immigrants each day had their DACA-issued work permits expire because they were unable to apply in time for renewals.

After March 5, that number might be as high as hundreds of immigrants a day. Estimates from the Migration Policy Institute suggest that over the two years starting on March 5, 2018, an average of 915 work permits issued under DACA will expire daily. US Citizenship and Immigration Services data suggests that the pace will start slow, with 425 immigrants losing work permits daily in March, but will pick up aggressively a few months later.

But due to some recent court decisions, it might not end up being that many.

A pair of federal court orders — one issued in California in January, and one issued in New York in February — have slowed DACA’s unraveling by allowing DACA recipients to apply for two-year renewals again. As a result, it’s actually impossible to tell how many immigrants are losing work permits on March 6 — and how many will have new ones that last through March 2020 or later.
 ISO New England: holding at $125/MWh.

ISO Australia, link here. In Victoria and South Australia, holding at $110/MWh but this afternoon will hit $14,500/MWh. And no one seems alarmed. Wow.

Spark Spreads -- EIA -- January 23, 2019

This is far beyond what I can comprehend -- at least for now. A reader sent me the link. The reader is very, very knowledgeable about the industry but says he has not heard of "spark spreads" before.

The link takes you to a February 8, 2013, EIA article: an introduction to spark spreads.

For the archives.

From the article:
The spark spread is a common metric for estimating the profitability of natural gas-fired electric generators. The spark spread is the difference between the price received by a generator for electricity produced and the cost of the natural gas needed to produce that electricity. It is typically calculated using daily spot prices for natural gas and power at various regional trading points.

A limitation of the spark spread calculation is that it does not take into consideration other costs associated with the generation of electricity, such as pipeline costs or fuel-related finance charges, and other variable costs (like operations and maintenance costs), taxes, or fixed expenses. In that sense, a spark spread is an indicator of market conditions, but it is not necessarily an exact measure of profitability for any one specific generator. 
The Literary Page

I don't know -- can't recall -- if I've ever read -- completely -- a work by Charles Dickens. Over the Christmas break I decided to tackle Charles Dickens' A Tale of Two Cities. I got off to a slow start.

After three weeks, I have just completed the first two chapters. LOL.

Wow. Tough sledding. I have to get into the rhythm of Dickens' writing. I read the first chapter three or four times and there are still phrases / idioms which I cannot "decipher." But I moved on to the second chapter. It's starting to move along and I'm getting into the rhythm.

I've decided that I will read the book the way the book was first read when it came out. Dickens' released the book one chapter at a time, one chapter every week, beginning on April 30, 1859.  I will  read one chapter every night or so before I go to bed. It is likely I will have to read each chapter two or three times before moving to the next chapter, although with time, as I get into the rhythm and writing style of Dickens, I expect it will go faster.

This was an incredibly tumultuous period in western civilization: coming just before the American Civil War.

But last night, while reading the second chapter for the third time, and really, really reading very, closely, reading every word, it just dawned on me. Wow, Dickens sounds just like Mark Twain. Or Mark Twain sounds just like Charles Dickens. In fact, my first impression: Dickens is better at "doing" Mark Twain than Twain himself.

I knew not one thing about their corresponding timelines, if they were even alive at the same time. I wasn't even thinking about that.

Charles Dickins: 1812 - 1870

Mark Twain: 1835 - 1910

So, the google search: charles dickens reads like mark twain.

Who wudda thought?

I wonder how many thousands of high school / college term papers have been written comparing Mark Twain with Charles Dickens.

The first chapter or two also reminded me of the early chapters of JRR Tolkien's Lord of the Rings. In fact one of the first characters in A Tale of Two Cities is named Tom.

Anyone remember Tom Bombadil?

January 23, 2019

Tbe new normal, at least for now: New Englanders paying $125/MWh; anything above $35 is immoral but that's what you get with non-dispatchable renewable energy. Link here

Back to the Bakken
Wells coming off the confidential list Wednesday and yet to be reported, the "Tuesday wells":

Wednesday, January 23, 2019
  • 34197, 2,086, CLR, Norway 9-5H2, Fancy Buttes, t11/18; cum 10K 11/18; 
  • 33643, IA/n/d, CLR, Ransom 5-20H2, 33-053-08052, 8.7 million gallons water, 90.1% water by mass; Elidah, t--; cum --;  
Tuesday, January 22, 2019
  • 34879, 1,066, Newfield, Berg Federal 149-97-30-31-4H, 33-053-08527, 9.8 million gallons water; 92% water by mass;Haystack Butte, t11/18; cum 13K after 17 days;
  • 34878, 734, Newfield, Berg Federal 149-97-30-31-5H, Haystack Butte, t11/18; cum 9K after 16 days; 
  • 34613, SI/NC, WPX, Benson 3HC, 33-053-08425, no frack data at FracFocus as of 11/18; Squaw Creek, no production data, 
  • 34476, 386, Lime Rock Resources, Laura Sadowsky 2-1-36H-142-96, 33-025-03437, 9.1 million gallons, 92.9% water by mass; Manning, t7/18; cum 42K 11/18;
  • 34475, 389, Lime Rock Resources, Laura Sadowsky 3-1-36H-142-96, Manning, t7/18; cum 47K 11/18;
  • 23939, drl, XTO, FBIR Ironwoman 21X-10E, Heart Butte,
Active rigs:

Active Rigs63573847157

RBN Energy: part 5, how LNG exports will change gulf coast natural gas markets in 2019
One of the biggest factors affecting the U.S. natural gas market in 2019 will undoubtedly be the dramatic rise in LNG export demand. The slate of liquefaction and LNG export capacity additions this year will boost U.S. demand for feedgas supply to nearly 9 Bcf/d by the end of the year, almost tripling the 2018 full-year average of 3.1 Bcf/d and close to doubling the December 2018 average of 4.6 Bcf/d, with the lion’s share of that growth happening along the Texas and Louisiana Gulf Coast. Three liquefaction trains — one each at Cheniere Energy’s Sabine Pass and Corpus Christi terminals, as well as one at Cameron LNG — are likely to be fully operational in the first quarter, with five additional trains due in rapid progression later in 2019. That much new gas demand concentrated in one region is bound to disrupt physical flows and pricing dynamics. Today, we wrap up the series with a look at the timing and feedgas routes for the final two facilities: Freeport LNG in Texas and Kinder Morgan’s Elba Island project in Georgia.
This is Part 5 of our series detailing the LNG export capacity additions due online in 2019 and the feedgas pipeline capacity that’s lined up to serve them. Earlier, we looked at recent changes at the two operational terminals — Cheniere Energy’s Sabine Pass Liquefaction (SPL) and Dominion Energy’s Cove Point LNG facility in Maryland. SPL kicked off the 2019 LNG exports boom last fall when it began ramping up its fifth 4.5-MMtpa train, ahead of schedule. By December, SPL as a whole was taking more than 3.5 Bcf/d, with the help of a new feedgas delivery point via Kinder Morgan Louisiana Pipeline’s (KMLP) 600-MMcf/d Sabine Pass Expansion, which is fully contracted by Cheniere. Around that time, in mid-October, Cove Point LNG returned from a multi-week maintenance event and, with the in-service of upstream pipeline expansions — Williams/Transco’s Atlantic Sunrise and TransCanada/Columbia Gas Group’s WB Xpress — the 770 MMcf/d East Coast export facility began firing on all cylinders for the first time since it came online in early 2018. By late November, Cheniere’s Corpus Christi LNG (CCL) also began commissioning its first liquefaction train on the Texas Gulf Coast, also ahead of schedule, with Train 2 close on its heels.
Among these three facilities, feedgas flows ended 2018 above 5 Bcf/d, double where they started the year, near 2.5 Bcf/d. And SPL’s Train 5 and CCL’s Train 1 are just two out of a full eight new liquefaction trains due to be commercialized this year that will catapult U.S. feedgas demand for LNG exports to almost 9 Bcf/d by the end of 2019. That includes three new trains at Cameron LNG in Louisiana, the first of three trains at Freeport LNG near Freeport, TX, as well as the 10 mini-trains being developed at Elba Liquefaction in Georgia.
That much incremental demand growth in a relatively short span of time –– and mostly concentrated along the Gulf Coast –– is all but guaranteed to disrupt and reconfigure old gas flow patterns in the region. Recall that these LNG export projects need to line up three key commitments: 1) customer commitments for the train capacity (i.e. demand for LNG off-take); 2) supply contracts with gas producers to feed the trains, and 3) transportation capacity to get the gas there, including the capacity to move the gas those last few miles from the mainline delivery point to the terminal itself.
Most recently we examined the feedgas routes and pipeline projects lined up to deliver gas to Cameron LNG in Louisiana, where Train 1 is also gearing up to take feedgas this quarter.
Today, we conclude the series with a look at the timing and pipeline routes that will serve LNG production at the two other terminals that have plans to begin exporting this year: Freeport LNG and Elba Island LNG.