WTI: $100.21 -- March 1, 2022

Misdiagnosis: if one reads between the lines, one can see "panic" setting in, as WTI goes over $100 this morning and images we're going to start seeing coming out of Ukraine today. President Biden to give State of the Union Address tonight. His aides now asking: "Tell us again why we didn't do the address in January?" Link here.

8:00 a.m. CT:

• oil
• WTI: up 5%; up $4.74; trading at $100.46
• Brent: p 5%; up $5.17; trading at $103.14

First group "financial / economic" indicators:

• 10-Year Treasury: link here. Yield down five basis points; yield at 1.792%.
  
• DXY: link here. Up 0.36%; trading at $97.07.
  
• Silver: link here. Up another 1.4%; now at $24.705.
  
• Gold: link here. Up a bit, up 0.23%; tradng at $1,913.31.
  
• CBOE volatility index: link here. Explained at Investopedia. 32.19. Trending up.
  

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Back to the Bakken

Royalties: North Dakota state officials will not challenge a new law regarding oil and gas royaltiees; ends their pursuit of $69 million the state had sought for energy development prior to August, 2013;
link here or direct to The Bismarck Tribune.

This will end the state's challenge to the constitutionality of a new North Dakota law that prohibits the state from collecting unpaid royalties for oil and gas production that occurred before Aug. 1, 2013.

At issue are deductions oil and gas companies removed from royalties to account for transportation and processing costs. The Land Board has for several years sought to collect those deductions following a favorable Supreme Court ruling in 2019 in a case involving oil producer Newfield Exploration Co. The case has implications for numerous state oil and gas leases with other companies.

To put this in perspective, the most recent deposits to North Dakota's Legacy Fund are running about $60 million / month. The state was looking for a "one-month windfall." From my perspective: sometimes it pays to be a "good neighbor" and move on.

Active rigs:

$100.21	3/1/2022	03/01/2021	03/01/2020	03/01/2019	03/01/2018
Active Rigs	32	15	52	67	59

Tuesday, March 1, 2022: 1 for the month, 109 for the quarter, 109 for the year

• 38122, conf, CLR, Dennis FIU 3-8HSL1, Big Gulch, no production data,

RBN Energy: unseen costs of energy transition: minerals, metals, and construction materials. 

Among the many challenges facing the energy transition, one is particularly ominous: a lot of stuff will need to be produced, fabricated, and constructed to replace the hydrocarbon-based energy network that runs the world today. 

We’re talking wind turbines, solar arrays, energy storage batteries, electric vehicles, and all of the other infrastructure and components that will be needed to make the energy transition happen. Not only will all this stuff require a lot of concrete and steel, it also will demand huge quantities of specialty metals and minerals such as lithium, copper, chromium, neodymium, etc. It’s a fact that a decarbonized energy network is much more material intensive — that is, it takes a lot more total investment in minerals, metals, and construction materials to produce the same energy as comes from hydrocarbons. 

Further complicating things, the increased material needs will be front-end loaded. In today’s RBN blog, we discuss the materials-related challenges facing the energy transition.