Tuesday, October 5, 2021

Notes From All Over -- Part 2 -- October 5, 2021

Gas deal, long story, short version:

  • Questar Pipeline.
  • Dominion.
  • Berkshire Hathaway looked to buy Questar from Dominion earlier this year; 
    • changed mind when Warren Buffett thought regulators wouldn't okay it.
  • dormant
  • earlier today, being reported that Southwestern Gas interested in Questar
  • Carl Icahn, investor in SWX said "no"
  • tonight it's being reported SWX bought Questar Pipeline
  • link at Hart Energy
    • SWX paid $2 billion
    • if I recall, Warren Buffet was going to pay $1.3 billion

Biggest Rivalry In Baseball -- Wild Card Series Starts Tonight .... October 5, 2021

... and ends tonight. This is quite incredible. A one-game playoff between the New York Yankees and the Boston Red Sox. Win or go home. Well, only true for NYY ... the game is being played in Boston.

Printing Money

Literally. The debt limit? Janet Yellen can raise the debt limit on her own --apparently she doesn't need permission. As US Secretary of the Treasury she can apparently authorize her department to print a "one-trillion-dollar" coin and deposit it with the Federal Reserve. Link here.

A White House spokesperson has ruled this out. My hunch: the White House will launch its own cryptocurrency, and call it, not Bitcoin, but Bidencoin. 

WTI: To Infinity And Beyond

Per bbl:

  • today: $80
  • through the next six months: $90 trading range
  • end of 2022: $180

That's what some are saying.

Killing the Keystone XL could come back to haunt Resident Biden. 

If OPEC+ is near their capacity short term, and WTI moves toward $100 / bbl, it's unlikely US shale operators would hold back.

Big Headline, Small Story -- But Deep Inside The Story, What We've Been Saying For Quite Some Time -- October 5, 2021

OPEC+ raises November oil production quote to 39.7 million bpd. That was the headline. Link to Tsvetana Paraskova. Some details:

  • will stick to plan
  • will ease collective cuts by 400,000 bpd
  • article discusses Russia's confusing situation: official Russian data doesn't discriminate betweeen crude oil and condensate production, but condensates are excluded from Russia's OPEC+ quote

Now look at this:

Bloomberg estimates put Russian crude and condensate production in September at 10.7 million bpd. If condensate production was around 880,000 bpd, this would put Russian crude oil output at 9.83 million bpd, which would be 130,000 bpd above quota, as per Bloomberg calculations.

Analysts say that Russia may have reached its capacity to produce oil, while several OPEC members of the pact such as Angola, and at times, Nigeria, have struggled to pump to quotas over the past few months.

This is one of the key reasons for the over-100-percent compliance with the total cuts.

And then this

The OPEC+ group of producers raised their compliance with the production cuts to 116 percent in August, up from 109 percent compliance in July, sources from the alliance told Reuters in September. Despite the higher production, OPEC was actually pumping at some 10 percent below its overall quota for the 10 members bound by the OPEC+ pact in August, due to outages and technical difficulties in countries such as Nigeria and Angola, Bloomberg noted last month.

Aramco Mega Deal
Saudi Foreign Investment to Record in 2Q21

Link to Charles Kennedy.

Saudi's foreign direct investment (FDI)

  • generally runs around $1 billion per quarter
  • but 2Q21: a staggering $14 billion
  • key investment: $12 billion that involved Saudi Aramco: pipeline network in the desert

WTI Closes Seven Cents Below $79; Four New Permits -- October 5, 2021

Breaking: Jim Cramer will be interviewing ENB/CEO at top of the hour on Mad Money. Jim has made it very clear. He said he has been very, very negative on oil. He says very clearly four oil companies represent change: ENB, PXD, CVX, and DVN. "These are real change companies" -- Jim Cramer. Quite amazing. See my "Devon post," August 7, 2021. 

$3.5 trillion bill: LOL. I've been saying this for weeks. Joe Manchin has his price. LOL. He must have finally gotten something he wanted into the spending bill. Now signals he's ready to support super spending. It's good that the $3.5 trillion won't cost taxpayers a dime, according to Resident Biden. LOL. 

Debt ceiling: meanwhile, GOP getting ready to support raising the debt ceiling. 

Simple arithmetic: 1+1 = 3.

  • 1: $3.5 trillion spending bill
  • 1: debt ceiling raised
  • 3: market

NFLX: surges on back of "The Squid Game." Netflix hits record high. Netflix downloads hit record high. This is quite incredible. No link. Featured on CNBC. Google it. In original language. Dubbed. Still #1 in US. Reminder: Seinfeld back on Netflix. 

WTI: wowza! Closes just seven pennies below $79. Nothing to suggest this isn't going higher in the short term. 

Hold your horses: link to Tsvetana Paraskova. The energy transition will take decades, not years. Some / many / most energy transition proponents (may) have confused Covid energy demand destruction with a change in consumer behavior.

Back to the Bakken


  • North Dakota has permitted a second TENORM waste well
  • will be located halfway between Williston and Alexander along US Highway 85.
  • link to WillistonHerald.

Active rigs:

Active Rigs2311586459

Four new permits, #38598 - #38601, inclusive:

  • Operator: Murex Petroleum
  • Field: Tioga and West Tioga (Williams)
  • Comments:
    • Murex -- first time we've seen this name in a long time in the Bakken -- has permits for two Sheldon Mark wells, and two Borstad wells, 
      • all in NESE 34-158-95;
      •  the wells will be sited 2227 FSL and between 510 FEL and  660 FEL;

Ovintiv resurveyed five locations, the Kramer pad in NENE 18-150-97, McKenzie County;

Who's Winning, Who's Losing -- October 5, 2021

Shale, some of those who make money from the US shale oil and gas industry:

  • blue collar (roughnecks, drilling and fracking, infrastructure, truckers)
  • white collar (geologists, lawyers, landmen)
  • CEO, directors, bankers
  • venture capitalists
  • major investors
  • mom-and-pop retail investors
  • mom-and-pop mineral owners
  • surface owners (often farmers)

So, of the categories above, where is the biggest shift, taking into account the data at this article?


  • during a boom, the mom-and-pop mineral owners do particularly well, but in the manufacturing stage, their returns may drop a bit;
  • in the current situation, when shale operators are refusing to go crazy with drilling, and North Dakota production drops from second place to third place, mom-and-pop mineral owners will see a drop in royalties -- unless the price of oil increases significantly


  • North Dakota dropping from second place to third place is a non-story; but a great story, nonetheless

In other words:

  • if one's primary income from shale tends to be from the mineral rights, it might not look so good now, except for the fact that less production is being offset by higher prices;
  • if one's primary income from shale is through investing in shale companies like Devon, CLR, etc., now is a pretty good time -- see the linked article above.

Bottom line:

  • I'm lovin' it.

Notes From All Over -- Part 1 -- October 5, 2021

Breaking: WTI goes over $79. No doubt Resident Biden is calling OPEC this morning. I don't know what Biden is calling OPEC but it's probably a four-letter word. LOL.

Road to New England: link here. ISO NE.

Streaming: in passing on CNBC --

  • teens: 32% of ther video consumption is from Netflix; down "slightly" from 38% in past years
  • only one streaming company was mentioned: Hulu consumption is increasing (at expense of Netflix?)
  • cable television dropping way, way back

Dividend increase: Centerpoint

  • bittersweet
  • huge cut in dividend mid-2020
  • now gradually increasing that dividend again;
  • announced a penny increase in the dividend to 17 cents/share
  • record date: November 18, 2021; payable in early December (December 9, 2021)

Awards: nominee for "Doofus of the Year, 2021” award:

Mileage this past weekend:

  • Enterprise rental
  • Toyota Camry, 2021
  • almost all highway driving; driving at 70 - 80 mph most of the time on interstate
  • total mileage, mostly highway: 1,516 miles
  • total gallons of regular unleaded: 42.135 gallons
  • cost per mile: about 8 cents/mile
  • in city driving in my own car in Euless Texas, a 2011 Honda Civic, I average five to ten cents per mile





Miles Traveled Since Last Stop

Gallons To Fill Up


Price per gallon

Cost to Fill Up

Thursday, Sept 30, 2021


12:20 p.m.



4:15 p.m.







Sunday, October 3, 2021


3:00 p.m.








10:00 p.m.








7:00 a.m









Total Gallons Gasoline /  MPG



Total Gasoline Costs


Cost Per Mile


Another Most Fascinating Story This Week? Possibly -- Crisis! Everything's A Crisis -- Now It's Alaska Salmon -- October 5, 2021

When I read this story, I immediately thought of the US lobster story. 

Headline: dwindling Alaska salmon leave Yukon River tribes in crisis. Link here

This is what caught my attention: some are blaming the disappearance of salmon on global warming, and yet there is no research or data to back up that claim. What is not discussed is the "over-fishing."

"Over-fishing" is mentioned but it's deep in the article, easily missed "... a state that supplies the world with salmon ..." "... it's increasingly clear that overfishing is not the only culprit."

A long, long article and absolutely no numbers -- how much salmon is actually harvested every year.

From another source:

Alaska ranks ninth among seafood-producing nations in the world. Forty-two percent of the world's harvest of wild salmon and 80 percent of the production of high-value wild salmon species such as sockeye, king, and coho salmon, come from Alaska waters.

From the linked article:

STEVENS VILLAGE, Alaska (AP) — In a normal year, the smokehouses and drying racks that Alaska Natives use to prepare salmon to tide them through the winter would be heavy with fish meat, the fruits of a summer spent fishing on the Yukon River like generations before them.

This year, there are no fish. For the first time in memory, both king and chum salmon have dwindled to almost nothing and the state has banned salmon fishing on the Yukon, even the subsistence harvests that Alaska Natives rely on to fill their freezers and pantries for winter. The remote communities that dot the river and live off its bounty — far from road systems and easy, affordable shopping — are desperate and doubling down on moose and caribou hunts in the waning days of fall.

“Nobody has fish in their freezer right now. Nobody,” said Giovanna Stevens, 38, a member of the Stevens Village tribe who grew up harvesting salmon at her family’s fish camp. “We have to fill that void quickly before winter gets here.”

The "chum" numbers plunged in one year. Climate change doesn't work that way. 

King, or chinook, salmon have been in decline for more than a decade, but chum salmon were more plentiful until last year. This year, summer chum numbers plummeted and numbers of fall chum — which travel farther upriver — are dangerously low.

... a state that supplies the world with salmon ...

 For a completely different view, see this article published July 28, 2021: after a difficult year (Covid-19 related), Alaska's salmon industry is back.

This year, optimism among those who are out fishing is bolstered by forecasts. 
Bristol Bay is home to the world’s largest wild sockeye salmon run. 
Prices are way up from last year and biologists believe they might see the largest run of Alaskan sockeye on record this summer. 
“We are expecting a big run,” said Travis Elison. He’s the Bristol Bay area management biologist for Alaska’s Department of Fish and Game. 
“We forecasted over 50 million fish for Bristol Bay total. We are seeing indications of a run that could be much larger than that. This one has the potential to be a record total run to Bristol Bay.” The number of fish caught this year has already surpassed 60 million. It’s all welcome news for fisherman Nathan Hill. He uses a 300-foot setnet that’s fixed to the beach to harvest sockeye out of Naknek. When the tide is in, it floats his net and dozens of salmon swim straight into it.

Time to get out the atlas:

  • Stevens Village
  • Yukon River
  • Norton Sound
  • Bristol Bay
  • Bering Sea
  • just to get started

One Slawson Mauser Federal Well Comes Off Confidential List Today -- October 5, 2021

For the archives: Antarctica posts coldest winter since records began. 

FWIW, top stories from The LA Times today:

  • research has confirmed the dramatic erosion of the Pfizer-BioNTech COVID-19 vaccine’s protection against “breakthrough” coronavirus infections
  • as Congress considered COVID-19 relief earlier this year, mayors from across the U.S. pleaded for “immediate action” on billions of dollars to shore up their finances and revive their communities. But as of this summer, a majority of large cities and states hadn’t spent a penny of those funds.
  • New Zealand admits it can no longer completely get rid of the coronavirus.

Energy crisis: scanning through my twitter feed this morning suggests this could be a very, very interesting year with regard to price of oil and natural gas. It's almost as if the folks following this closely are seeing one story and mainstream media is either seeing another story, missing it completely, or simply uninterested. 

Peak oil? This has been a consistent them on the blog for perhaps as long as the blog has been running. Not sure when I first posted this likelihood / possibility. Link here to Irina Slav. Most interesting: CNBC, et al, do not seem to have considered this. See Saudi Arabia production numbers -- non-government sources -- here. All things being equal, Saudi production is increased in the summer to meet domestic demand (power for a/c).

Bottom line: when it comes to OPEC production, ignore the speeches and press releases coming out of OPEC (Saudi Arabia); watch the production data. 

Oil, days of supply: the best indicator of where the US stands with regard is the amount of oil in storage measured in "days of supply" and that number is gradually increasing.

WTI: solidly above $78.

Is EU changing the narrative? A reader notes that the EU is suggesting more government control to supply affordable energy and confront climate change. The tea leaves suggest the EU leaders are not concerned in the least about the price of natural gas, with tea leaves suggesting they actually want natural gas to go much higher, make it so painful that voters clamor for more renewable energy. This is very fascinating. 

In the US: would the price of oil be the top story if it weren't for Covid? 

Let's check some ticker symbols, pre-market:

  • ENB: no trading; closed yesterday: $40; P/E, 17;
  • EPD: whoo-hoo! Up 4% yesterday; now at $22.63, up slightly pre-market; P/E, 13
  • SRE: no trading; closed yesterday, $127, well off its high, but a $124-stock; P/E, 18;
  • OKE: no trading; closed yesterday, $60; P/E, 20
  • DVN: whoo-hoo; apparently pretty flat yesterday but up over two percent in pre-market today; P/E of 218;
  • HES: no trading; closed at $82.78 yesterday; P/E, --
  • EOG: flat yesterday, but up almost two percent in pre-market today; up $1.59, right at $88; which is its 52-week high; P/E 27
  • AAPL: the only thing that matters for AAPL, it's P/E = 27.

Back to the Bakken

Active rigs, updated end of day:

Active Rigs2711586459

One well coming off confidential list: 

Tuesday, October 5, 2021: 6 for the month, 6 for the quarter, 230 for the year:

  • 37195, conf, Slawson, Mauser Federal 6-18-17H, North Fork, it is unlikely the scout ticket will be updated; NDIC has not updated scout tickets for several months; where production data is being updated it has been delayed. Cannot say if status of wells as reported on scout tickets is accurate any more.

RBN Energy: western Canada's propane balances look even tighter.

It wasn’t that long ago that Western Canada was awash in propane, sending the vast surplus for export by railcar to the U.S. That has changed in the past two years as direct exports to Asia opened up and Canada’s domestic demand for propane rose. With supplies becoming tighter, the combined effect with increasing demand spells trouble for higher exports to the U.S. this winter, a time when they are desperately needed. In today’s RBN blog, we explore the current Western Canadian propane market and what might be next in store.


Of course, this does not mean supplies are in danger of running out, only that the difference between production and demand in 2021 and 2022 will be met from inventories. The stark shift in 2021 inventory levels so far this year versus 2020 reflects what has been a major mismatch between demand and production. For 2022, we think the increase in demand will still exceed rise in supply, resulting in another downshift for propane inventories, possibly sending them close to the record low seen in March 2013, when just 0.28 MMbbl were reported in storage.

There are plenty of uncertainties in this outlook, not the least of which is how severe the coming winter will be, not just in North America but also in Asia. A mild versus a cold winter could result in huge swings for either railed or marine exports and turn what is currently a snug market balance to an extremely tight or very loose one.

Putting that aside, there are some certainties that we can wrap our arms around looking to the end of 2022. For instance, Alberta propane demand will rise as Brookfield’s Heartland petchem complex begins operations. Marine exports are likely to be stronger next year compared to this year as the full impact of the Prince Rupert terminal becomes clear. Depending on the full magnitude and timing of these demand increases as well as the winter weather, railed propane exports, to the U.S. Midwest in particular, could fall as Alberta’s consumption and marine exports gobble up supplies.

But one needs to read the article to see how the summary is reached. Much more at the linked article.