Fun With Graphs -- March 4, 2019

The NOAA is tasked with and is predicting a two-degree Celsius rise in temperature one hundred years from now. That two-degree Celsius rise is not trivial. For example: the record wind chill this past week in North Dakota of minus 53 degrees would have been a more tolerable minus 48 degrees with a 5-degree rise in average global temperature.

The NOAA is also tasked with and is predicting the effects of El Nīno six months out. Repeat: six months out. See graphics below.

It should be noted that the y axis does not identify what is being measured, but it ranges from minus three to plus three. The "K" could suggest "degrees Kelvin."  Or maybe it's the number of fake news stories (on average) that will be published between now and then. I don't know.

The "best" case scenario trends to "zero" (no change); the "worst" scenario trends to "three."

I'm glad the NOAA was not responsible for forecasting the odds of successfully landing Apollo 11's lunar module on the moon. 

This is the forecast models:

The screenshot came from this tweet:

It would be interesting to extrapolate the results of those sixteen "models" out to one hundred years.

Bakken Boom Explored In Exhibit At MIT In Cambridge, MA -- Best Story Of The Day -- March 4, 2019

An excerpt from the linked story below, from a photojournalist/artist:

When I first saw fracking operations in North Dakota, it looked like surrealism in infrastructure.

The visual power of it was stunning. No one really knows what fracking looks like because it’s so politically sensitive that they mostly keep photographers out. If you looked up fracking on Google right now you’d see a picture of something else – an oil drilling derrick, something that’s been going on long enough that people have seen images of it.

In fracking, all these massive tubes look like giant octopi or sea creatures with men walking among them like weeds, tending them. It’s biblical. It’s very moving. Leave value judgements off for a moment. Fracking is part of our world. Why shouldn’t we see what it looks like? 

Wow, this is so cool. A reader sent me the link -- I would have completely missed it. MIT in Boston has an exhibit exploring the Bakken boom. The artist spent four years photographing and recording audio in the Bakken region of North Dakota, documenting the rise of the oil industry there and the large migration that went along with it.

From the oil rigs to the “man-camps” where workers live, artist Valery Lyman’s two-day power plant pop-up “Breaking Ground” looks unflinchingly at the landscape of American industry. In Lyman’s moving installation, centuries of boom and bust give way to new boomtowns and the latest technology; but while the infrastructure of extraction has changed, the optimism, hard labor, risk and loneliness are a constant over more than 200 years of the American experience. 

Photographs from Lyman’s work have been installed around the country and published by The [London] Guardian, the Los Angeles Times, and The Christian Science Monitor in the past few years. The installation this week at the Massachusetts Institute of Technology incorporates those images, along with audio from Lyman’s exploration of North Dakota from 2013 to 2016 – projected directly onto machinery throughout MIT’s Central Utilities Plant in Cambridge, making a singular art experience out of a plant providing electricity, steam heat and chilled water to more than 100 campus buildings.

Archived, because one just knows this article will disappear into the ether-net. 

North Dakota Cities Hit Wind Chill Records In Midst Of AGW; Extremely Cold At (The) Beach -- March 4, 2019

Fortunately it was a "dry" cold.

From The Bismarck Tribune, re-posting for the archives. We may never see this again.

Some of the coldest wind chills reported Sunday morning were 53 below zero in Beach and Bowman, 49 below at Denhoff and 48 below at Hettinger, Wishek and Grassy Butte, according to the National Weather Service.

In Bismarck, the wind chill was 44 below zero early Sunday morning.

The rest of North Dakota is in a wind chill advisory through noon Monday, with wind chills expected to be as low as 40 below zero.

Some western North Dakota cities set records over the weekend.

On Sunday, Dickinson at least tied its record low temperature for the day at 19 below zero.

On Saturday, Dickinson and Williston set records for the coldest maximum temperature recorded that day. The high at Dickinson was 1 below zero and the high at Williston was 5 below.

Enbridge Line 3 Delayed For At Least A Year; Minnesota's "Go Green" Scheme Doesn't Include Pipelines; QEP Starts Canceling Permits; Meanwhile, NDSU In DC -- March 4, 2019

First things first: from twitter, moments ago ---

Golf: it's only Monday and Tiger Woods has already withdrawn from one of the biggest tournaments of the year -- the Arnold Palmer Invitational -- blames a "neck strain." Must have been a bruisin' weekend.

Color it "dead." Enbridge to delay Line 3 by a year. Cites delay in getting permits. State now has new governor pledged to "go green." Pipeline don't fit a "go green" scheme. Update: I don't know if this is bad news or really bad news. Oilprice is reporting that Enbridge won't even re-start Line 3 for now. I may have that wrong, but it seems pretty clear. The article is pretty clear stating that the company won't re-start Line 3 as scheduled. The CEO is reported to have said that the company has been given assurance by the governor that everything will work out fine but the state needs six months to get all the permits in order before Enbridge can re-open the line. So, we'll see. Bottom line: more bad news for Canada just as Alberta was beginning to ease restrictions on production.

Colorado: meanwhile, another state that doesn't like jobs:

Colorado drillers are gearing up for a fight after Democratic lawmakers proposed overhauling the state's oil and gas commission and reforming regulations that could create new roadblocks to fossil fuel development.

Speaking of Colorado:

New England: tracking ISO New England here. Prices spiking and coal back in the mix.

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Back to the Bakken

Active rigs:

$56.59	3/4/2019	03/04/2018	03/04/2017	03/04/2016	03/04/2015
Active Rigs	68	59	45	35	114

Two new permits:

• Operators: Hunt, CLR
• Fields: Werner (Dunn County); Banks (McKenzie County)
• Comments:
• Hunt has a permit in section 24-146-93, Werner oil field
• CLR has another permit in section 18-152-99, Banks oil field

Three permits renewed:

• Whiting (2): two P Earl Rennerfeldt permits in Williams County
• Resource Energy Can-Am: a Shorty permit in Divide County

Nine permits canceled:

• QEP: nine MHA permits in Dunn County, all in section 26-149-91

It's Great To Be A Senior Now That The US House Is Leaning Left -- March 4, 2019

Open book test.

Multiple choice question: with a left-leaning US House and Bernie Sanders at the top among those running to be the Democratic nominee for president, will US seniors see better days ahead with regard to social security?

__ better days
__ much better days

An op-ed from The WSJ helps clarify.

Among the many tax increases Democrats are now pushing is the Social Security 2100 Act sponsored by John Larson of House Ways and Means. The plan would raise average benefits by 2% and ties cost-of-living raises to a highly generous and experimental measure of inflation for the elderly known as CPI-E. The payroll tax rate for Social Security would rise steadily over two decades to 14.8% from 12.4% for all workers, and Democrats would also apply the tax to income above $400,000. 

I could be wrong, but I believe the "social security tax" levied on employees/workers is a regressive tax.

Wiki suggests that

• social security taxes are regressive
• social security benefits are progressive

And:

The proponents are also sneaky in the way they lift the income cap on Social Security taxes. The Social Security tax currently applies only on income up to $132,900, an amount that rises each year with inflation. But the new payroll tax on income above $400,000 isn’t indexed to inflation, which means the tax would ensnare ever more taxpayers over time. This isn’t a drafting error. Democrats claim they only want to tax the rich but they know there aren’t enough rich to finance their redistribution plans. They want their hooks deeper into the middle class without middle-class voters figuring that out.

It should be noted that a lot of these "sneaky" details aren't "sneaky" at all. They are bargaining chips.

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Pompous Little Twit

From twitter today:

Patrick Moore was the co-founder of Greenpeace, Inc.

Not sure which is worse? Pompous? Little? or Twit?

Twelve years. That's all we have left. It's hard to believe that we were born just in time to see this happen.

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The Book Page

The Making of the Atomic Bomb, Richard Rhodes, c. 1986.

Every day I read 10 - 20 pages. An incredible book.

It is amazing to see how little physicists knew about the atom in 1941 and how far they came by 1945. The "science was never settled."

It is amazing to see how "compartmentalized" the researchers were, not only among countries (Germany, Britain, US, Russian, Japan, France) but also within countries.

MDU's Knife River Acquires Viesko Redi-Mix, Inc. -- March 4, 2019

Press release here.

Viesko, which does business as Viesko Quality Concrete, is based in Wheatland, Oregon, about 12 miles north of Salem and 40 miles southwest of Portland. The acquisition complements Knife River's existing Oregon operations and provides expansion for Knife River into the growing north Willamette Valley and Portland Metro markets.

Financial details not released.

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Pearl Harbor

The Making of the Atomic Bomb, Richard Rhodes, c. 1986.

Two US Army privates, radar operators, picked up the attacking Japanese on their radar at 7:00 a.m. on Sunday, December 7, 1941. The Japanese were 132 miles out. The radar operators estimated the number of planes to be about 50 but did not know the "source" of the airplanes. They radioed their observation to the "information center" at the other end of the island (Oahu). The receiving lieutenant told them not to worry about it. He did not know but surmised the aircraft were US B-17s being ferried to Hawaii.

The Japanese arrived -- a complete surprise.

The 43 fighters, 49 high-level bombers, 51 dive-bombers, and 40 torpedo planes had flown from six carriers holding station 200 miles to the north, carriers formidably escorted by battleships, heavy cruisers, destroyers, and submarines that had left Hitokappu Bay on the northern Japanese island of Etorofu on November 25 and sailed blacked out in radio silence across the stormy but empty northern Pacific for almost two weeks to achieve this stunning rendezvous. 

The torpedo bombers divided into groups of twos and threes and dived. The aircrews had prepared themselves to ram the battleships if necessary, but nothing restrained their attack. 

At 0758 the Ford Island command center radioed its frantic message to the world: AIR RAID PEARL HARBOR. THIS IS NOT A DRILL. 

Admiral Kimmel [Commander in Chief of the US Pacific Fleet] saw the attack begin from a neighbor's lawn -- "in utter disbelief and completely stunned," the neighbor remembers, "as white as the uniform he wore." 

..... three torpedoes into the California; two more into West Virginia; a fourth into Oklahoma that bounded the big ship and rolled it over bottom up; Arizone taking a bomb that detonated its forward explosive stores, ripped the ship apart, killed at least a thousand men and blew high into the air a grisly rain of bodies, hands, legs and heads; a torpedo tearing out Nevada's port bow....

... an hour later a second wave of 167 more attack aircraft deployed to further destruction...

eight battleships, three light cruisers, three destroyers, and four other ships sunk, capsized or damaged and 292 aircraft damaged or wrecked, including 117 bombers. And 2,403 Americans, military and civilians, killed, 1,178 wounded, in unprovoked assaults that lasted only minutes.

The following afternoon, Franklin Roosevelt, addressing Congress in joint session, requested and won a declaration of war against not only Japan but Germany and Italy as well.

Of course, the definitive narrative, At Dawn We Slept: The Untold Story of Pearl Harbor, Gordon Prange, c. 1981.

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Alphabet Jumping

TSLA Shares Continue To Slide -- March 4, 2019

Updates

Later, 4:53 p.m. CT: not smart.

Tesla owners have staged protests outside Tesla stores and Superchargers in some parts of Asia after the electric vehicle maker announced last week massive price cuts, which means that existing customers for some models in some counties have paid by up to 40 percent more for buying their Teslas before the price reduction.

Original Post

Tesla: over the past few months, Tesla has brought down their prices significantly (citing any number of reasons).

Three observations re: Tesla:

• Tesla announced that it is bringing to market the low-margin $35,000 Tesla Model 3
• Musk Melon announces that Tesla will close its showrooms; folks will get a chance to test drive a Tesla after they buy it 
• TSLA shares fell below $300/share on Friday, after the announcement, and are down another $5/share in early morning trading today, now trading below $290 (still a huge gain for those who bought TSLA shares prior to December, 2016

EV sales are tracked here. Sales:

• February, 2019, all EV sales in the US: 16,669
• February, 2018, all EV sales in the US: 16,845
• February, 2017, all EV sales in the US: 12,375

However, vehicle sales across the board plummeted in February, 2019. The longest "partial" government shutdown in US history was the 35-day shutdown that ended in late January. Pent-up demand for auto sales should have had a positive result in February. Three headlines:

• US vehicle sales in February fell, and demand was even weak for SUVs -- Autoblog
• US vehicle sales freeze in February; Fiat viability questioned -- Forbes
• US auto sales hit massive speed bum. Yes, even Jeep Wrangle sales fell -- Fortune

Market:

• GM: up slightly today, at around $40/share
• F: up about 1.6%, around $9/share

Fracking Strategies In The Bakken -- March 4, 2019

Fracking strategies in the Bakken are tracked here.

It is very hard to generalize -- it depends a lot on the field (location) and a lot on the operator.

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Shale Companies Risk Drilling Wells Too Close Together

From The WSJ:

Shale companies, adding ever more wells, threaten future of U.S. oil boom. Newer wells drilled close to older wells are generally pumping less oil and gas and could hurt output, leading frackers to cut back on the number of sites planned and trim overall production forecasts. 

It's a nice article for newbies who want to learn more about tight oil. The discussion is on "parent-child wells." As usual, the comments put the article in perspective.

Comments:

• as noted by another reader, The WSJ has generally reported only negative stories about the shale revolution
• I'm not seeing this problem (too many wells) in the Bakken; the NDIC and the oil companies seem to be managing the drilling units very, very well
• I think to say this about the Permian (too many wells) is premature -- that play has barely begun
• too many folks still look at tight oil drilling through the bifocal lenses of conventional drilling
• the oil companies will sort this out
• I'm inappropriately exuberant about the Bakken

From an investment point of view, one reader was upset that shares in EOG have not "moved" -- the reader says that based on that observation, he implies that he would not invest in shale, and suggesting that the majors (conventional oil) do much better. He should look at XOM:

• XOM: 
• $100/share, June, 2014
• today: $80/share
• EOG: 
• $117/share, June, 2014
• today: $97/share

Had that reader bought shares in January, 2016, he could have bought EOG for $70/share and sold for $130 in October, 2018.

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.

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Central Texas Frack Sand Mine Hours Drop 10%

That's the headline from Energent today. This was previously reported from another source. This is not a breaking news story.

The lede:

In 2019, Texas will reach over 130 million tons of production per year of frack sand nameplate capacity, of which 85% will come from Permian and Eagle Ford facilities, as new construction projects wind down and ramp to full utilization.

Energent is closely monitoring regional operations in central and south Texas as mines shut down in the first half of 2019. Pioneer Natural Resources and Covia Holdings Corporation reported future closures scheduled in the first half of 2019 through company press releases.

Pioneer is divesting their Brady assets as the company shifts to West Texas supply.

Additionally, Covia announced the idling of their Voca facilities in November of 2018. These facilities have a combined frac sand capacity near 10 MMTPY.

Other notable sand operators in central Texas are U.S. Silica, Permian Frac Sand, Erna Frac Sand, and Superior Silica Sands.

Morning Note -- March 4, 2019 -- CLR Reports Huge Fracks

Cold: pretty much the entire state of North Dakota is shut down:

Stories to come back to later today:

• TSLA continues its slide, down another 2.5% in early morning trading; cash on hand has not changed ($3.69 billion) despite supposedly paying a $1 billion debt on Friday in cash)
• trucking shortage -- The WSJ
• global oil and gas drilling set to surge in 2019 --  oilprice
• losers -- op/ed, The Boston Globe
• push to increase Social Security benefits for seniors; millennials to pay -- The WSJ; it's good to be a senior;
• shale companies, adding ever more wells, threaten future of US oil boom -- The WSJ 
• EV sales
• fracking completion strategies (see the wells that CLR reports today, below)
  

More Cold: ISO New England doing quite well.  But according to the WeatherChannel the cold hits New England tomorrow and Wednesday; and then another cold front to hit. So, we'll see.

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Back to the Bakken

Wells coming off confidential list today, over the weekend --  
Monday, March 4, 2019: 17 wells for the month; 17 wells for the quarter

• 35092, SI/NC, Hess, AN-Bohmbach-153-94-2734H-9, Antelope,
• 32818, 1,176, CLR, State Weydahl 10-36H2, Corral Creek, 56 stages; 10.6 million lbs, t12/18; cum 78K 1/19;

Sunday, March 3, 2019: 15 wells for the month; 15 wells for the quarter

• 35390, SI/NC, Newfield, Dahl 150-98-5-8--HLW, Siverston,
• 35091, SI/NC, Hess, AN-Bohmbach-153-94-734H-10, Antelope,

Saturday, March 2, 2019: 13 wells for the month; 13 wells for the quarter

• 35391, SI/NC, Newfield, Dahl 150-98-5-8-7H, Siverston,
• 33234, SI/NC, Hess, AN-Dinwoodie-153-94-2833H-4, Antelope,
• 33090, 3,092, CLR, Sakakawea Federal 6-19H, Elm Tree, 64 stages; 15.9 million lbs, t1/19; cum 43K 1/19; that 40,972 bbls was over 21 days, extrapolates to almost 60,000 bbls/30-day month;
• 32817, 1,632, CLR, Brandvik 11-25H, Corral Creek, 60 stages; 10.8 million lbs, t12/18; cum 75K 1/19;

Active rigs:

$56.24	3/4/2019	03/04/2018	03/04/2017	03/04/2016	03/04/2015
Active Rigs	67	59	45	35	114

RBN Energy:part 3, evolving crude availability for southeast Louisiana refiners.

Increasing U.S. shale oil production has benefitted many U.S. refineries, but along the Gulf Coast, the primary beneficiaries have been in Texas. As production increased in the Permian and Eagle Ford plays, new pipelines were built to supply refinery centers in Corpus Christi, Houston, and Beaumont/Port Arthur. In contrast, the availability of shale crude by pipeline to refineries in Southeast Louisiana has lagged. However, new pipeline capacity to the crude hub in St. James, LA, is about to change the dynamic in a major way. Today, we continue our series on St. James by discussing the Bayou State’s refinery infrastructure and how new pipelines could impact refinery crude slates.

With the onset of the Shale Revolution, growth in Alberta oil sands production in the 2010s, and the lifting of the U.S. crude export ban in December 2015, the St. James crude hub has been in a state of flux — and the changes have only just begun. Most importantly, the hub’s long-standing role as a recipient and distributor of imported crude and Gulf of Mexico production to the Midwest has been fading, and St. James — located 60 miles upriver from New Orleans — is increasingly valued for its ability to receive and stage U.S. shale oil, Gulf of Mexico production, and Canadian oil-sands crude for delivery to area refineries and export docks. St. James currently offers in terms of crude storage (about 38 MMbbl) and pipeline connectivity (inbound and outbound), as well as expansion plans are afoot to reflect the hub’s changing function.