The President Wins Another One -- July 28, 2019

Good, bad, indifferent.

Love him, hate him, somewhere in between.

President Trump wins another one.

Atmospheric CO2 -- FWIW -- Again, False Precision -- June, 2019, Data

Link here.

June, 2018: 410.79
May, 2019: 414.83
May, 2018: 411.31

Increase year-over-year: 0.76%.

3.14 units per million = 3.14 / 1,000,000 = 0.000000314 =0.0000314%. Okay.

If you drew a graph with the y axis from  zero to 10,000, with the x axis for the last ten years the line would be flat.  Just saying. The concentration of CO2 in the Venetian atmosphere, 96.5% or 965,000 ppm.

WTI Back To $57; Active Rigs In North Dakota Back Up To 60 -- July 29, 2019

Active rigs:

$57.02	7/29/2019	07/29/2018	07/29/2017	07/29/2016	07/29/2015
Active Rigs	60	62	61	35	73

Four new permits, #36797 - 36800, inclusive:

• Operators: Hess, MRO, WPX, Lime Rock
• Fields: Beaver Lodge (Williams), Reunion Bay (Mountrail), Heart Butte (Dunn County), Dimond (Burke County)
• Comments:
• Hess has a permit for a BL-Myrtrice well in section 24-156-96, Beaver Lodge,
• MRO has a permit for a Walsh well in section 8-151-93, Reunion Bay,
• WPX has a permit for a Nighthawk well in section 34-149-92,
• Lime Rock Resources III-A has a permit for a Mariner well in section 15-160-91;

Fourteen permits renewed:

• Petro-Hunt (8): three Chip Diller Federal permits; two Dudley Dawson Federal permits; a Joel Goodsen permit, and Robert the Bruce permit, all in McKenzie County; one Lloyd Christmas permit in Stark County
• Nine Point Energy (3): three Helling permits in McKenzie County
• Prima Exploration: a State permit in Divide County
• Denbury Onshore: one CHSU ML permit in Bowman County
• Liberty Resources Management Company: one Holmen E permit in Burke County

Trivia:

• Joel Goodsen: "Risky Business"
• Lloyd Christmas: "Dumb and Dumber"
• Dudley "Booger" Dawson: "Revenge of the Nerds" 
• Chip Diller: "Animal House"
• Robert the Bruce: "Robert the Bruce"

What Month Is This? July? Almost August? Kennedy Klan Running Out Of Ski Polish-- July 29, 2019

This is why they need the "bullet train": to move skiers from San Francisco and Los Angeles out to Mammoth Mountain.

This was two years ago, 2017:

I think I recall posting that story two years ago. Wow, time flies.

Now, again, this year:

The "Plastic Straw" Problem In The Permian; The Staggering Growth Projected For DFW -- July 29, 2019

The graphic :

The link here.

As much as $9 billion will be needed over the next decade just to throw away dirty water in the world’s busiest shale field ...

.... drillers typically pump 30 Olympic-sized swimming pools of water into an oil well to fracture the surrounding rocks. In return, as much as 10 barrels come rushing back out for every one barrel of crude

... recycling efforts aren’t robust enough to handle the 17.5 million barrels of dirty water produced DAILY in the Permian Basin of West Texas and New Mexico

... produced water is 10 times saltier than seawater and can be tainted with heavy metals and radioactivity

“As the Permian Basin shifts further into manufacturing mode, the water growth we project will create the need for nearly 1,000 additional salt water disposal wells by 2030.”

$9 billion / 1,000 wells = $9 million. If I'm reading this correctly -- I must be missing something -- it costs $9 million to drill a SWD well in the Permian? It only costs $6 million to drill/frack a well int he Bakken. I must be missing something.

1,000 additional SWD wells. Sounds like a lot, but trivial in the big scheme of things

• 1,000/10 years = 100/year
• 120/year = 10/month

Sounds like a slow news day.

It would have been nice to see number of oil and natural gas wells projected over the same period of time.

Glad you asked. From Forbes, December 27, 2018:

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Texas Factoids

Overheard at Starbucks this morning -- from credible source:

• population of DFW metroplex, "today": 7.5 million
• growth north of Dallas: Plano, Frisco, McKinney will reach its limit (the river to the north)
• population center for the DFW metroplex by 2050: Roanoke
• population of the DFW metroplex by 2050: 50 million

I see this every time I drive from Grapevine, TX (the DFW airport) to Plano or Frisco, north of Dallas.

I see huge expansion just beginning on TX 141 west of DFW airport and north of Ft Worth, centered at the Texas Motor Speedway.

EIA Highlighting New Hampshire Today For Some Odd Reason -- July 29, 2019

Never would have guessed, state GDP:

• New Hampshire
• North Dakota

But then this, on per capita basis, North Dakota was #6, barely trailing California and big states in northeast:

• 2018 rankings --

What led me here?

If you can see the "growth"  in wind, you have great eyesight. Net electricity generation going down over time suggests negative growth unless the electricity generation being measured in-state and consumption of out-of-state electricity not included. I don't know, but on it's own, this is not a graph a governor would want to brag about, unless, of course, she/he is speaking to a "no-growth" crowd. And that's fine.

Notes From All Over, Part 1 -- July 29, 2019

Notable companies reporting earnings today: of the 158 companies expected to report earnings today, none interest me except, perhaps:

• McDermott International, forecast, 18 cents, after market close
• Pfizer, forecast, 75 cents, but it really doesn't interest me any more
• QEP, after market close, forecast 3 cents;

But that's about it.

Early morning trades:

• Dow up almost 80 points, mid-morning
• S&P 500: down only 4 points, it certainly could reverse and close higher, which would set yet another record; not counting on it, just saying
• other indices down a bit; profit-taking after hitting new highs last week
• AAPL "rallies" ahead of earnings tomorrow -- CNBC -- some rally; up 1.33%; but considering the alternative, nice to see
• TSLA: really? who cares? down almost 2% today in an up market for the Dow; other indices down so TSLA simply trading with the NASDAQ
• UNP: my favorite right now -- huge proxy for US economy -- up an incredible 1.6%; up almost $3; apparently folks finally got the news about the dividend increase
• SRE: down slightly; folks must have read RBN Energy yesterday / today

Fed action this week and my prognostications:

• a cut of one-half percent: the markets go wild; but it suggests the Fed knows things we don't know and those things are really, really bad; Fed won't cut one-half percent
• a cut of one quarter percent: if the Fed doesn't do any cut at all, the markets will collapse short term; I'm not sure Fed chairman could handle the heat from all his Wall Street friends; the Fed will cut one-quarter percent
• no change: after a while, "no change" means "no decision" or "no change" becomes it's own decision; depends how you look at it; but at some point, it seems, most folks are telling the Fed to do something, anything, but quit with the two-page press release and "no change";  get on with something; the Fed will do something
• increase by a quarter percent: after the most recent GDP reading (first estimate, 2Q19, 2.1%) this is exactly what the Fed should do; in addition, the Fed needs another quarter-percent arrow in its quiver; if the US enters a recession in the next 12 months, it certainly won't be because of a quarter-percent hike; the market would collapse for a few days (buying opportunity) but next week back to where it was, maybe even new highs; Fed won't increase rates at all; not even on the table as a consideration
• increase by a full half-percent: suicidal for the Fed chairman; but it would be fun to see the tweets that would come out of the West Wing, and the hand-wringing from Warren Buffett on down; won't happen

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

Politics: wow, give it up, and why I don't subscribe to The Atlantic any more. Today, July 28, 2019, this story: "Searching for Beto: the breakout star of the 2018 midterms has had a disappointing 2019 presidential run. Can he turn it around?" Wow, what a joke. Folks are finally woke. An incredible fraud.  No, I did not read the article. Presidential politics are tracked here. Most recent polling data,  here. Beto remains at 2.7% overall, only because one poll has him at 4%; otherwise he would be about 2.5%. LOL. Sanders and Warren both at about 15%. Biden will be lucky to break 30% b the time of the DNC convection. Looking forward to new polls after this week's debates. Curious to see how much makeup can do to make folks look 30 years younger. The whole thing still suggests a brokered convention with diva ex machina outcome: more likely Michelle, not Hillary.

Debate line-up -- 

First night:

• Williamson
• Delaney
• Hickenlooper
• Ryan
• Bullock
• Klobuchar 
• O'Rourke
• Buttigieg
• Warren
• Sanders

Second night: the rest, which would include Biden and Harris.

Active Rigs -- July 29, 2019

Wow, everyone is really "hung up" on the number of active rigs in the US. Nothing new here. Just idle rambling on a very, very slow news day. From Energent today:

Summary of Plays 

• Permian Basin: +0.7% to 443 rigs compared to last week's 440 rigs 
• Eagle Ford: -1.5% to 66 rigs compared to last week's 67 rigs 
• Marcellus: -3.4% to 56 rigs compared to last week's 58 rigs 
• Haynesville: stayed flat at 51 rigs 
• Cana Woodford stayed flat at 49 rigs 
• Williston: -14.7% to 47 rigs compared to last week's 55 rigs 
• DJ-Niobrara: +7.4% to 29 rigs compared to last week's 27 rigs 
• Powder River: +4.8% to 22 rigs compared to last week's 21 rigs 
• Utica stayed: -11.8% to 15 rigs compared to last week's 17 rigs 
• Granite Wash: stayed flat at 4 rigs 

Now that I know the difference between the way Baker Hughes counts active rigs and the way the NDIC counts active rigs, following the rig count in the Bakken will be much more interesting.

The news is so slow, I'm going to have to go to reading a book. Good luck to all.

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Censorship

Lots of talk right now about how the US government needs to step in to regulate / censor  companies like Alphabet (Google), Apple, Amazon, Facebook, Yahoo.

It would behoove folks to read Chapter 9 in Kevin Birmingham's 2014 The Most Dangerous Book: The Battle James Joyce's Ulysses. At the end of the day, I fear government censorship / regulation more than the companies being threatened.

Chapter 9, "Power and Postage" is all about US censorship --

... the regime that began in earnest in 1873, when Anthony Comstock boarded a train to Washington, DC, with a draft of a new federal law in his pocket and a satchel filled with his dirtiest pornography. Comstock was the head of the New York Society for the Suppression of Vice, and because he understood the power of words, he understood the power of the Post Office. -- p. 111.

The rest is history.

I'm severely limiting my obsession with buying any more books. I've simply run out of shelf space. I've culled (as in "selectively slaughtered") my library, and am trying to be very, very careful on new purchases.

The Birmingham book I'm reading is from the library. It looks like I may end up purchasing this book, along with James Shapiro's Year With Lear.

1873.

I think Hugh Hefner was still fighting the US Post Office as late as 1951 but I'm rusty on the details.

Idle Rambling Monday Morning Waiting For Markets To Open -- July 29, 2019

First things first: incredibly beautiful bike ride today. You know how that first sip of a really, really cold beer tastes on a hot day, or a that first whiff of bacon from your iPhone, well, that's how it feels when I jump on my old hybrid of a bike and coast downhill out of the apartment complex, just before dawn. It is so incredibly exhilarating.

This morning, I checked the time. I normally don't do that. I don't ride to make time, I ride because it's so enjoyable. In fact, about halfway to work, I noted that I was going too fast; I was getting a bit tired. I was anxious to get to Starbucks to start working. But then I remembered: I was biking because I enjoy it, not because I'm trying to get somewhere ... in fact, to be clear, I do not bike:

• for the exercise (then it would become no fun; it would feel like work)
• for the sole purpose of getting somewhere (if that was the case, I could drive) 
• to wear the latest fashion (wow, I must look strange -- an old white guy in street clothes with a backpack and lots of red flashing lights)

I ride simply because of the endorphin rush it apparently gives me.

Actually I never get going that fast to get an endorphin rush.

I left at 6:23 a.m. It was still a bit dark -- not really dark -- no headlight needed, but I certainly felt more comfortable with several flashing red lights on my back. The few clouds that there were had that really, really nice pink "fingery" look -- the line we learned in eighth grade Latin -- Homer's "rosy-fingered dawn." For some reason, that phrase has always stuck with me.

Sunrise today:

I arrived at Starbucks on Tate at exactly 6:43. It took me a minute to get off the bike, turn off the lights, yada, yada, yada. The best part: my favorite spot/chair was empty. I was the only customer in the shop. It's starting to fill in now, but the big revenue stream -- and it is a stream -- is the drive through. In about thirty minutes the next revenue stream begins, the mobile ordering; folks order on the way to work, park, walk in, grab their coffee and walk out.

I love it when employees from other restaurants are standing in line for their coffee. There's one now; she has an apron on but I can't tell where she works.

I'm free until 10:30 at which time I will be an Uber driver for the three granddaughters. Three round trips today:

• noonish
• late afternoon
• early evening

Anyway, enough of this.

The market is open.

No wells coming off confidential list today.

Is The Bakken Heading Toward A Crude Oil Pipeline Overbuild? -- RBN Energy -- July 29, 2019

How desperate is China for more oil? China still taking Iranian oil despite tougher US sanctions. In addition, I bet China is getting a great deal -- a steal, some would say -- from Iran.

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Pipeline Negotiations in Mexico

Updates

August 27, 2019: Reuters is reporting that issues between Mexico and US pipeline companies have been resolved. 

Original Post

 

Mexico: Rigzone has a nice little update. Things do not look good. This has huge implications for the "southern surge," something we've discussed before. This is most concerning at so many levels, not just for investors (in the note below, CFE is the state utility -- think a nationalized Con Ed on steroids):

Although now the go-to fuel for power and industry, there is simply no national gas strategy in Mexico. Instead, the focus of the AMLO administration is on new crude oil production and refineries – both too expensive for Pemex, already over $100 billion in debt. In addition, supported by AMLO, CFE has been using arbitration hearings to try and nullify terms for 25-year contracts in natural gas transportation. The argument is that CFE should not have to make capacity payments for delayed pipelines not yet operating.

Even when a start-up date is announced, there is just too much uncertainty. For example, TransCanada and IEnova’s 2.6 Bcf/d undersea Sur de Texas-Tuxpan, running 480 miles from Brownsville, Texas, to Tuxpan, Veracruz state in southeastern Mexico, should already be in operation. But just on July 3, CFE blocked the start of commercial gas flows until the transport contract that anchored construction is renegotiated. All of this is obviously giving even more pause to potential investors and pushing a mature Mexican gas market farther out of reach.

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

Mexico Refinery

Mexico: from Bloomberg, the refinery. I believe this was posted previously but it's still important enough to post again, just in case.

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

Back to the Bakken

No wells came off the confidential list this past weekend and none are scheduled to come off today. This is the longest stretch I have seen of no wells coming off the confidential list. We wll see new wells tomorrow, however.

Active rigs:

$56.21	7/29/2019	07/29/2018	07/29/2017	07/29/2016	07/29/2015
Active Rigs	58	62	61	35	73

RBN Energy: is the Bakken heading towards a crude oil pipeline overbuild? Part 2. Archived.

Bakken crude oil production surpassed 1.4 MMb/d this spring and has maintained a level near that since, even posting a new high just shy of 1.5 MMb/d in April 2019. The rising production volumes have filled any remaining space on the Dakota Access Pipeline (DAPL) and prompted midstream companies to step up expansion efforts to alleviate the pressure, even as questions linger about the possibility of a pipeline overbuild if all of the announced capacity gets built. Specifically, the market is weighing the need for the recently announced Liberty Pipeline and a DAPL expansion. Today, we look at these two new projects and what their development means for the supply/demand balance in one of the U.S.’s biggest shale basins.

What we do know is that until new pipeline capacity out of the Bakken comes online, there will be more and more Bakken barrels that won’t find a home on existing pipeline systems. Based on our forecast growth, there could be up to 200 Mb/d of stranded crude that needs to move via rail out of the Bakken heading into early 2020, before either Liberty or a DAPL expansion gets completed. And as more barrels transition from pipeline pricing to rail pricing, Bakken differentials could widen as well, moving in tandem with the higher cost to transport crude via rail.

The List Deserved A Stand-Along Post -- July 29, 2019

Previous links:
RV Sales, Recessions, and All That Jazz, July 27, 2019
RV Sales and Recessions, Zerohedge, July 26, 2019

From zerohedge a few days ago:

The question is, what makes up "recreational services and vehicles"? A reader provided a list:

• Televisions, 
• Other video equipment 
• Audio equipment
• Recorded music and music subscriptions 
• Pets and pet products(1)
• Pet food
• Purchase of pets, pet supplies, accessories 
• Sporting goods
• Sports vehicles including bicycles(1)
• Sports equipment
• Photographic equipment and supplies
• Film and photographic supplies
• Photographic equipment
• Recreational reading materials
• Newspapers and magazines(1)(2)
• Recreational books(1)(2)
• Other recreational goods
• Toys, games, hobbies and playground equipment
• Sewing machines, fabric and supplies
• Music instruments and accessories