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Friday, April 19, 2019

Largest Cross-Border Natural Gas Pipeline (By Volume) To Be Operational Early This Summer -- April 19, 2019

Re-posting because it's making America great again. 

From SeekingAlpha:
TransCanada and IEnova's (Sempra Energy) Sur de Texas-Tuxpan pipeline to add U.S. natural gas export capacity to Mexico should come online by the end of June.
The Texas-to-Mexico pipeline had been expected to come online by mid-February but technical and other problems have delayed the project by more than a year.
Sur de Texas will connect with Enbridge's 2.6B cf/day Valley Crossing pipeline; once the entire pipeline system comes online, it will comprise the largest cross-border gas pipeline by volume.

Just In Time For Earth Day -- Hurricane Michael Upgraded To Category 5 -- April 19, 2019, Part 7

When I got this note from a reader earlier today, I thought it was a  joke or a hoax. After all, the science is settled. We know for a fact that the earth will be 2.3 degrees warmer on April 19, 2101, than it was on April 19, 2019.

But then we get this report. Six months after the event, "scientists" upgrade(d) Hurricane Michael to category 5. Apparently the "scientists" found evidence that the wind speed was 160 mph -- up from the 155 mph originally reported -- when the hurricane hit landfall.

Exactly 160 mph. Not 159.9 or 160.1 but exactly 160 mph. Amazing how that worked out, because to be categorized as a Category 5, need to hit 160 mph.

From the article:
Scientists made the determination after reviewing aircraft and surface winds, surface pressures, satellite intensity estimates and Doppler radar velocities, and a fudge factor based on the presidential approval rating.
I can't make this stuff up.

The reader who sent me this noted that the "upgrade" was just in time for Monday, April 22, 2019.

The significance of that date: that's Earth Day.

From The Wall Street Journal:

I assume if "they" can upgrade a hurricane six months after the fact, the Florida folks can manage a presidential recount two years after the fact, and declare Hillary the president. After all, she received the most "popular" votes. 

Using the word "popular" very, very loosely.

April 19, 2019 -- Back To The Bakken

A problem the Bakken does not have: water.

The Permian. "The largest challenge to Permian field development. -- Rigzone. Data points:
  • this is all about disposal
  • even with 100 percent water re-use for completions, which is unlikely, the current salt water disposal infrastructure is expected to hit capacity in the near future
  • trucking a major traffic problem in west Texas
  • water disposal costs can account for a third of total lease operating expenses in the Permian
  • water midstream space is “ripe” for mergers and acquisitions and revealed that it expects the pace of water-related infrastructure deals in the Permian to “pick up considerably” in 2019
That's disposal. What about frack water?
Back in January, Rystad Energy revealed that demand for frac water in the Permian exceeded the total U.S. demand of 2016. The company forecasted at the time that water demand in the Permian will likely surpass 2.5 billion barrels by 2020.
I've lost the bubble on this one, but I believe operators use four to five times the amount of sand to frack a well in the Permian compared to that used in the Bakken, and a corresponding increase in sand requires a corresponding increase in water.

Marathon has cracked the code on using less sand (and thus less water) in the Bakken.

By the way, no mention of earthquakes.

What We Do On The Weekends When Not Blogging About The Bakken
video by Sophia, Ft Worth Stockyards (Texas)

April 19, 2019, T+7, Part 5 -- New York City's Population Dips For First Time In Over A Decade

It doesn't really matter whether the city's population dips. What's important is who's fleeing? If it's the rich and famous, NYC is in trouble.

So, let's see what The Wall Street Journal has to say.
International migration into New York City’s five boroughs tapered off, as more residents left, shrinking the city’s population in 2017 and 2018, according to U.S. Census Bureau numbers released Thursday.
New York’s population dropped 0.47% to 8.4 million by July 2018, compared with the previous year. Census officials previously estimated that New York’s population grew by about 7,000 in 2017, but revised figures show it actually dipped by about 38,000, a 0.45% decline from the prior year.
Officials with New York City’s Department of City Planning said it appeared that the city’s robust population expansion, fueled by new young residents, in the past decade appears to have begun its inevitable slowdown. Overall, the number of residents in the five boroughs grew by 2.7% from 2010 to 2018.
"Inevitable." Say what?

More from the story:
Net migration, the sum of all people moving in and out of the city, has also decreased in recent years. In 2011, that number increased by about 14,300, a reversal of a decadeslong downward trend. That number began to fall again in 2013 and shrank by about 87,000 in 2018, as the city reverted back to its previous trend, city planning officials said.
A few other major metro areas in the U.S. also reported declines. The Los Angeles metro area shrank by 0.1%, and Chicago declined by 0.2%. Pittsburgh and Cleveland also showed similar drop-offs.
Los Angeles County—the nation’s largest county, which includes the cities of Los Angeles, Long Beach and Pasadena—also posted losses in 2018 because of a slowdown in international migration and more residents leaving. The number of residents in the county dipped to 10.10 million, a 0.1% decline. The county’s population was essentially flat in 2017.
Wow, what a lousy story. Not one bit of analysis. 

Whatever. The "southern surge" will eventually turn things around for NYC, LA.

Note that "a few other major metro areas in the US" did not include any in Florida or Texas, two states with no state income tax.

Just saying.

April 19, 2019, T+7, Part 4 -- This Is How I Know No One Really Cares About The "Student Loan Crisis"

We hear a lot about the "student loan crisis." There's even a "wiki" page. The Hill has come up with part of the solution but the fact that the US House -- now in Pelosi's control -- has not addressed the problem and the fact that Occasional-Cortex has not offered a bill to solve the problem -- tells me everything I need to know. It's a great political issue; a great political talking point; but, an issue that no one really wants to solve.

If one wants to eliminate all student debt, here's one way to do it.

First, drop the student loan rate to zero percent over six years, dropping it from 6% to 5% this year. From 5% to 4% the following year. From 4% to 3% the following year, until five or six years from now, student debt interest is zero percent and parents are only paying on the principal.

Then, five or six years from now, "write off" five percent of the debt. Then the next year, "write off" another five percent. The third year, another five percent. Ten years out, folks are no longer paying interest, and their loan is now 85% of what it was in 2019. If that's too slow, "write if off" at 10% each year.

New debt: interest at 0.1% above the money market rate with same "elimination" plan. Let folks rack up as much student debt as the government will allow, and then do the same thing. After five years, "write off" the interest owed, and gradually write off the principal.

I'm not saying I would recommend this or not as a solution, but the fact no bill has been proposed by any US representative tells me all I need to know. It's a great political issue but it's not going anywhere. At least not until Bernie wins and takes the US House and US Senate with him.

But that 6% on student loans is ridiculous.

Re-Posting: LNG Export Terminals In The News -- Making America Great -- April 19, 2019

LNG export: FERC approves two LNG export projects. Some of this may have been previously reported:
  • Houston-based Tellurian Inc.'s Driftwood project on the Louisiana coast
  • San Diego-based Sempra Energy's Port Arthur LNG
This is why this story is important: "FERC is making a lot of headway on processing LNG applications in a more efficient manner, and I’m proud of the work that we are doing," FERC Chairman Neil Chatterjee said in an April 18 press release.
This won't happen under a Biden, Beto, Buttigeig, or Bernie administration. Scary. Pocahontas, herself, has said she will stop issuing new oil and gas permits on federal land. Really scary.

Florida LNG project: hits milestone. Rigzone. Data points:
  • Eagle LNG Partners
  • $500-million project
  • final environmental impact statement from FERC
  • final step in the environmental review process before the final federal authorization decision deadline
  • the developer initiated the FERC process in December, 2014
  • LNG export projects tracked here
  • I don't recall the Florida project on that list, and I don't see it now, but I may have missed it
******************************
Natural Gas Fill Rate

I was snookered this past year being worried about the natural gas fill rate.

American roughnecks managed just fine, thank you.


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Meanwhile In Mexico

From SeekingAlpha:
TransCanada and IEnova's (Sempra Energy) Sur de Texas-Tuxpan pipeline to add U.S. natural gas export capacity to Mexico should come online by the end of June.
The Texas-to-Mexico pipeline had been expected to come online by mid-February but technical and other problems have delayed the project by more than a year.
Sur de Texas will connect with Enbridge's 2.6B cf/day Valley Crossing pipeline; once the entire pipeline system comes online, it will comprise the largest cross-border gas pipeline by volume.

April 19, 2019, T+7, Part 2

Poor space? North Dakota governor signs "pore space" bill opposed by North Dakota landowner group. Right, wrong, indifferent: transparent; good discussion; informed decision-making process.
The bill approved by the House and Senate this week has implications for saltwater disposal wells, which are necessary for oil and gas production, and enhanced oil recovery operations. The original bill included language related to temporary storage of natural gas as an alternative to flaring, but those references were removed in the final bill.
“With the clarifying amendments, we’re confident that the bill protects landowners and preserves their compensation opportunities,” Burgum said in the statement.
North Sea Dated: previously posted. Worth re-posting; link here. This would not have happened under a Beto, Bernie, Buttigieg, or Biden administration. And, Pocahontas, wants to put a lot of American oil workers out of work, taking a page from Hillary's play book when the latter promised to put a lot of US coal miners out of work.

McDonald's: just in time for dinner tonight with Sophia. This is what makes McDonald's great: focusing on the bottom line. I always thought "going premium" at McDonald's was a huge mistake. Folks don't select McDonald's for "premium" hamburgers.
McDonald's Corp said it would remove costlier, premium burgers from its menus in favor of its more popular Quarter Pounders, shifting its focus to simpler and quickly-served burgers.
The burger chain added the Signature Crafted burgers to its menu two years ago to keep up with competition from Wendy's and Shake Shack, which serve more premium burgers using fresh ingredients.
But putting together the burgers took time, slowing down service lines at drive-thrus and at stores.
These premium beef, grilled or crispy chicken burgers came with condiments like pico guacamole, sweet BBQ bacon or maple bacon dijon, compared with the Quarter Pounders, which are beef patties served with ketchup, pickles and onions.
The company said its new deluxe and bacon Quarter Pounders received good feedback and it would continue to focus on such items.
State income taxes: I could look at this graphic all day.

Keeping America great: workers responding to recent midwest snowstorm. Remember those photos of all those utility poles laying down after the "spring" winter storm. When America needs to respond, it does it in style. Look at all those cranes putting new poles in place:

April 19, 2019, T+7, Part 1 -- Nothing About The Bakken

Note: I won't be following mainstream media news for the next week or so, but it's impossible to miss the headlines and/or miss the 30-second news updates on talk radio. Mueller report? Sounds like that train has left the station. Now, the action switches to the "House."

Economy: because of all the "interest" in the Mueller report, a lot of folks, I think, are missing the economic news. This is for the archives.

April 19th: data from the first quarter 2019 is now coming in.

Jobs: first time unemployment claims are at a 50-year low; and fell again this week, after experts forecast there would a jump in claims. There weren't. A 50-year low. And the data point hardly warrants a headline. This is simply incredible. Link here.


US retail sales: this, too, was incredible. Link here. Lost in all the Mueller clutter. For March, 2019: 1.6% increase, month-over-month. Simply incredible. Comes off a miserable February report. But you would never know it if you weren't looking. Historical data at this link. A change of 1.6% is the highest we've seen in a year -- and is well ahead of the previous yearly high of 1.2, back in May, 2018. A "1.6%" is the third highest change in five years and the third or fourth highest going back ten years.

US housing starts: link here. Permits and starts were both less than forecast, but not a big disaster. Will do fine.

Big thinkers: Cory Booker and Kirsten Gillibrand both voted against this year's Missouri River flooding disaster relief.

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.

ATT: link here. The spin-offs begin. This could well be the story of the decade. First, go back and look at the properties owned by Time Warner at the time ATT bought Time Warner. Link here. Look at the incredible number of companies ATT acquired in one deal. This week ATT sold its minority stake in Hulu. We're talking about a very, very small position -- and ATT sold it's stake for more than $1.4 billion. Time Warner had acquired that stake for $600 million about three years ago. ATT is going to have to divest a lot of assets to pay off its huge (and ballooning debt). Another investor weighs in on ATT.

LNG export: FERC approves two LNG export projects. Some of this may have been previously reported:
  • Houston-based Tellurian Inc.'s Driftwood project on the Louisiana coast
  • San Diego-based Sempra Energy's Port Arthur LNG
This is why this story is important: "FERC is making a lot of headway on processing LNG applications in a more efficient manner, and I’m proud of the work that we are doing," FERC Chairman Neil Chatterjee said in an April 18 press release.
This won't happen under a Biden, Beto, Buttigeig, or Bernie administration. Scary. Pocahontas, herself, has said she will stop issuing new oil and gas permits on federal land. Really scary.

Florida LNG project: hits milestone. Rigzone. Data points:
  • Eagle LNG Partners
  • $500-million project
  • final environmental impact statement from FERC
  • final step in the environmental review process before the final federal authorization decision deadline
  • the developer initiated the FERC process in December, 2014
  • LNG export projects tracked here
  • I don't recall the Florida project on that list, and I don't see it now, but I may have missed it
SLB: earnings fall but revenues tops estimates.

BK: miserable first quarter. And bad news may continue for another quarter.

KSU: also beat forecasts, as did UNP. Railroads reflect the strength of the US economy. CSX also reported a solid quarter; led transports higher.

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Inflation / Interest Rate Talk

Inflation is dead. Jerome Powell (the "Fed") appears to be having difficulty accepting this.

Over at ZeroHedge: contrarian alert -- "Is Inflation Dead?" makes the cover of BusinessWeek. Or is it Businessweek? The writer argues:
Belief in the “low inflation” myth stems from the overly rigid reliance on conventional inflation indicators while completely ignoring the inflation in asset prices, which has resulted in extremely large and dangerous bubbles that will ultimately burst with disastrous consequences. As the chart [at the site] shows, assets such as global stocks and bonds have risen at a much higher rate than global real economy prices since the current bull market began in March 2009.

The people who are currently scratching their heads about low inflation while ignoring the massive asset bubbles that are growing right under their noses are the same ones who didn’t see the housing bubble’s warning signs in the mid-2000s. They were the ones justifying the growth of the housing bubble by saying “housing prices are rising because our population is growing,” “Americans are becoming wealthier and want larger, more luxurious homes,” and so on.
During a bubble, the “crowd” will always tell themselves lies so that they don’t have to acknowledge the scary implications of the bubble and its coming burst. Once the bubble pops, they claim it was a freak occurrence that “nobody could have seen coming!” We’re making the same mistakes that we made during the housing bubble, but it’s just occurring in different industries, assets, and countries.
From John Kemp today, a Reuters market analyst:
The U.S. economy hit a soft patch during the first three months of the year with manufacturing output up only slightly compared with the same period a year earlier and freight movements mostly down. 
The current slowdown resembles the summer of 1998, when a similar loss of momentum prompted the Federal Reserve to cut interest rates by 75 basis points between September and November.  
Policymakers have given no indication they will respond the same way this time, but if there is no sign of re-acceleration by the end of June, the central bank is likely to cut rates at least once in the second half of the year.
So, we'll see.

If we see a rate cut, "Katie, bar the door."

Haynesville Sets All-Time Natural Gas Production Record -- April 19, 2010

The Haynesville is tracked here. Beats production record set back in 2011. Data points:
  • old record, 2011: 10.4 billion cubic feet per day (1.73 million boepd)
  • April, 2019, currently producing: 10.522 billion cubic feet per day (1.75 million boepd)
  • forecast: to hit 10.754 billion cubic feet per day
  • Haynesville, currently #3 in US natural gas production (depths, 10,500 - 13,500 feet)
    • #1: Appalachia basin: Marcellus and Utica (depths, 4,000 to 8,500 feet)
    • #2: Permian
  • Haynesville began to rebound in 2017: increasing rig count; improved IP rates

Easter Friday -- April 19, 2019

Wells coming off confidential list today --
Friday, April 19, 2019: 64 wells for the month; 64 wells for the quarter
DateOil RunsMCF Sold
2-20191876320336
1-20193549638267
10-20187550
  • 33878, conf, Crescent Point Energy, CPEUSC Bennie-2-20-17-157N-99W MBH, Lone Tree Lake, no production data;
Active rigs:

$64.074/19/201904/19/201804/19/201704/19/201604/19/2015
Active Rigs6359502993

RBN Energy: "off today."

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The Peterson Wells


  • 34463, 1,431, CLR, Peterson 5-29H1, 60 stages; 6.1 million lbs; East Fork, t1/19; cum 39K 43 days;
  • 34462, 1,806, CLR, Peterson 4-29H, 60 stages; 9.1 million lbs,East Fork, t1/19; cum 43K 40 days;
  • 34460, 1,934, CLR, Peterson 2-29HSL, 60 stages; 9.2 million lbs, East Fork, t1/19; cum 55K 42 days;