A Huge Shout-Out And Thank You To The Readers -- March 24, 2022

Updates

March 25, 2022: with regard to EVs below. To clarify: I did not say that EVs won't be the huge success "everyone" says they will be and I did not say that EVs won't take over the world, all I'm saying is that I have no plans to invest in EVs. There are too many other better options for investing.

Original Post 

Wow, there were a number of great comments today / tonight. I am now just getting caught up with the comments. I learn a lot from those reading the blog and commenting or e-mailing. Thank you very much.

I still have to so much to blog tonight but probably won't get done. We'll see.  

We are living in very, very interesting times. It was purely serendipity I stumbled upon Peter Zeihan tonight. My worldview has changed immensely.

At 8:00 p.m. tonight, 2000 hours, I was "bullish" on EVs -- not because they make sense but because, as an investor, one needs to understand what's going on in order to make the right investment decisions.

After an hour with Peter Zeihan my world view changed completely. I'm done with EVs as a long-term investment. 

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

There are too many other investing opportunities. 

So, the line in the sand, 9:00 p.m., 2100 hours, March 24, 2022, I'm done with investing in EVs. I think I am directly invested in only one EV company -- Ford, and that's a very small holding -- I will continue to hold it, maybe even add to it, not because it's an EV company, but because it's an American automobile company. But I will be watching it closely. 

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

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The Apple Page

I have a few links to add here. I will do that tomorrow.

Globalization And Capitalism -- March 24, 2022

This is very bad. 

Link here. Economic strength, East vs West.

Link here. Putin and Xi exposed the great illusion of capitalism.

Link here. "The energy transition is dead. We just haven't realized it yet." -- Peter Zeihan

Wiki entry. Peter Zeihan, Accidental Superpower: The Next Generation of American Preeminence and the Coming Global Disorder (2014). From the book as "reported" by wiki:

Zeihan frames the current (c. 2014) geopolitical situation as the drawdown of the global economic system that the United States imposed upon the free world at Bretton Woods after its victory in World War II: 

The United States used its overwhelming naval superiority to build a global trade network as a means towards the end of soviet containment, but is belatedly realizing that the Soviets are gone, that the rest of the world's markets don't have much to offer because they are entering dire economic straits due to aging demographies, and that America is insulated both geographically and, thanks to shale oil, energy independent (c. 2014).

With that in mind, Zeihan predicts a U.S. disengagement from the world (2014), which in turn will leave other states to fend for themselves in securing access to food and energy commodities. He predicts an imminent period of international disorder:

American disinterest in the world means that American security guarantees are unlikely to be honored (c. 2014: since then Afghanistan, Ukraine). 

Competitions held in check for the better part of a century will return. Wars of opportunism will come back into fashion (c. 2014). History will restart (c. 2014). Areas that we have come to think of as calm will seethe as countries struggle for resources, capital, and markets. For countries unable to secure supplies (regardless of means), there is a more than minor possibility that they will simply fall out of the modern world altogether.

This is perhaps the most interesting post on this site since its inception.

From Peter Ziehan's newsletter website, this from 2015, repeat, 2015:

Ziehan is an American, raised as an adopted child in Iowa.

No New Permits; Ten Permits Renewed; Two DUCs Reported As Completed; WTI Gives Up Some -- March 24, 2022

US equity markets:

• Dow: closes up 349 points
• S&P 500: closes up 64 points
• NASDAQ: closes up 270 points

Shift: just a month ago, some Dems were advocating an outright ban on US crude oil / natural gas exports. 

Now, apparently, the US is preparing a major LNG shipment-plan, akin to the Marshall Plan or the Berlin Airlift. Link here. My hunch: Biden is going to announce a plan more massive than anyone might imagine. This would solve a lot of problems.

US natural gas / crude oil: all of a sudden, bigger than ever. Link here. EU assesses no-Russian-gas scenario for next winter. 

Diesel: Austrian energy giant limits sales. Diesel may end up being the #1 energy story of 2022.

EVs: tracked here. Hertz adds Tesla's Model Y crossover to its EV offering. Previously only the Tesla Model 3 was available. Link here

. Think about it. Right now Teslas only available in DC, Florida, California, and Georgia. I bet most rentals in urban areas require less than a full tank of gasoline or a full electric charge. In other words, rent a full charged EV and return it and not have to pay for any gasoline or electricity. Or perhaps a nominal charge for re-charging. 

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Back to the Bakken

Bakken mineral acres: a reader writes that a "land company" off their family $5,600 /mineeral acre in a Tier 1 area in McKenzie County this past week. Last May, 2021, about a year ago, the same "land company" offered $2,900 / mineral acre. 

Active rigs:

$111.40	3/24/2022	03/24/2021	03/24/2020	03/24/2019	03/24/2018
Active Rigs	35	15	50	69	60

No new permits.

Ten permits renewed:

• BR (7): four Saddle Butte permits, three Curtis permits, all in McKenzie County;
• Lime Rock Resources (2): a Harlan Rebsom permit and a Robert Sadowsky permit, both in Dunn County;
• Enerplus: a Moran permit in Dunn County;

Two producing wells (DUCs) reported as completed:

• 31365, 2,205, Grayson Mill, Topaz 20-17 5TFH, Banks, no production data,
• 36209, 811, XTO, FBIR Baker 34X-25H, Heart Butte, minimal production data,

NDIC Hearing Dockets For April, 2022

Usual disclaimer applies: I do this quickly for my benefit. I do not expect readers to read this summary. There will be content and typographic errors. I used shorthand that may be confusing.  For all I know the links may not even be correct. I haven't checked them in quite awhile. In a long note like this there will be content and typographical errors. If this is important to you, go to the source.

Link here.  

Tracked on the blog here.

Cases, not permits.

Tuesday, April 19, 2022
One Case

A case, not a permit:

• 29279, NDIC, to amend current field rules and/or impose a policy to establish a drill-back policy for horizontal wells.

Wednesday, April 20, 2022
Nine Pages

Cases, not permits:

• 29280, Ovintiv,Sandrocks-Bakken; establish an overlapping 2560-acre unit; sections 2/3/10/11-150-100; one well, McKenzie;
  
• 29281, Ovintiv, Tobacco Garden-Bakken, establish an overlapping 2560-acre unit, sections 4/5/8/9-150-99, two wells; McKenzie;
  
• 29282, Hess, Tioga-Bakken; establish an overlapping 2560-acre unit; sections 5/6/7/8-158-94, one well, Mountrail;
  
• 29283, Hess,Tioga-Bakken; establish an overlapping 2560-acre unit; sections 17/18/19/20-158-94, one well; Mountrail County;
  
• 29284, Oasis, Squires-Bakken, establish a standup 1920-acre unit; sections 17/20/29-155-102, four wells; Williams County;
  
• 29285, Oasis, Squires-Bakken, establish a standup 1920-acre unit; sections 18/19/30-155-102; four wells, Williams County;
  
• 29286, Oasis, Squires-Bakken, establish an overlapping 3840-acre unit; sections 17/18/19/20/29/30-155-102; one well; Williams County;
• 29287, Oasis, Squires-Bakken, establish an overlapping 3840-acre units, sections 16/17/20/21/28/29-155-102, one well; Williams;
  
• 29288, NDIC, Dollar Joe-Bakken, setbacks for existing and future wells completed in sections 25 / 36 - 156-97, Williams County;
• 29289, Foundation, Bicentennial-Bakken, a) one vertical well, and b) two horizontal wells in a 640-acre spacing, section 28-144-10, Golden Valley County;
• 29290, Gary Hagen, legalese, costs / payments due for multiple wells, Banks Field, McKenzie County;
• 29291, Hess, Manitou-Bakken, four wells on a 1280-acre unit, sections 15/22-156-94, Mountrail County;
• 29292, Hess, Manitou-Bakken, five wells on a 1280-acre unit, sections 27/34-156-94, Mountrail County;
• 29293, Hess, pooling,
• 29294, Hess, pooling,
• 29295, Hess, pooling,
• 29296, Whiting, commingling,
• 29297, Whiting, commingling,
• 29298, Whiting, commingling,
• 29299, Grayson Mill, commingling,
• 29300, Grayson Mill, commingling,
• 29301, MRO, Killdeer-Bakken, two wells on a leaseline 2560-acre unit, sections 17/18/19/20-145-94; Dunn County;
• 29302, MRO, commingling,
• 29303, Ovintiv, Sandrocks-Bakken, eight wells on each of two 1280-acre units, sections 1/12 and sections 2/11-150-100; McKenzie County
• 29304, Ovintiv, commingling,
• 29305, Oasis, pooling,
• 29306, Oasis, pooling,
• 29307, Oasis, pooling,
• 29308, Oasis, pooling,
• 29309, Foundation Energy, pooling.
  

Thursday, April 21, 2022
Six pages

Cases, not permits:

• 29310, Crescent Point Energy, Blue Ridge and/or Winner-Bakken, establish four 1920-acre units; three wells on each; twelve wells total; Williams County;
• 29311, CLR, Jim Creek-Bakken, establish two overlapping 3840-acre units, two wells; Dunn County
• 29312, Hunt Oil, Ross-Bakken, establish an overlapping 1280-acre unit, sections 8/17-156-90; seven wells, Mountrail County;
• 29313, WPX, Heart Butte and/or Deep Water Creek Bay-Bakken, i) Dunn, McLean counties;
• 29314, WPX,  Heart Butte and/or Twin Buttes-Bakken, establish a 1920-acre unit, 1/2-147-92 and section 6-147-91; eight wells, Dunn County;
• 29315, Resonance Exploration, West Roth-Madison, establish a 720-acre unit, E/2, E2 W/s of section 36-163-79 and NE/4, E/2 NW/4 of section 1-162-79, a multi-lateral horizontal well, Bottineau County;
• 29316, Resonance Exploration, establish a 640-acre unit, section 26-162-80, a multi-lateral horizontal well, Bottineau County;
• 29317, Resonance Exploration, South Westhope-Spearfish/Charles, establish a 640-acre unit, S/2 SW/4 of section 1 and S/2 NE/4, NW/4, S/2 of section 12-162-80, a multi-lateral well, Bottineau;
• 29318, Grayson Mill, for Lucy Hanson, file #36674, to be completed under field rule exceptions, Williams County;
• 29319, CLR, costs associated with Grayson Mills wells;
• 29320, WPX, pooling,
• 29321, WPX, pooling,
• 29322, WPX, pooling,
• 29323, WPX, pooling,
• 29324, WPX, pooling,
• 29325, CLR, pooling,
• 29326, CLR, pooling,
• 29327, Crescent Point Energy, commingling;
• 29328, White Rock, commingling;
• 29329, WPX, Heart Butte-Bakken, seven wells in an existing 640-acre unit, section 9-149-91; Dunn County;
• 29330, WPX, Heart Butte-Bakken, two section line wells, section 1/12-148-93; Dunn County;
  

The CPC -- Tengiz Oil Field -- Caspian Sea

Updates

March 29, 2022: CPC pipeline outage forces Kazakhstan to cut oil output by a fifth. 

The CPC Pipeline 

The Kashagan is tracked here.

The Caspian Pipeline Consortium: wiki entry. 

Supports:

• mainly, the Tengiz field;
• also, the Kashagan and the Karachaganak fields

Terminal:

• the Novorossiysk-2 Marine Terminal on Russia's Black Sea Coast

March, 2022: storms severely damage the terminal at Novorossiysk

• will take at least two months to repair
• some say much longer

Graphic:

Notes From All Over -- The Snarky Edition -- March 24, 2022

Not in the mood:

• 1952: "I have a headache."
• 2022: "I tested positive for Covid-19 (again)."

Biden fires Dr Oz. LOL. Why did it take so long? Bye, Felicia.

NY Times wordle: solved on the third line; three letter clues.

Art Berman's tweet needs to be fact-checked. See comments at this link. Apparently posted by Art Berman with no comment.

All for now.

Economic Indicators -- March 24, 2022

My thoughts exactly, link here. I see neither a recession nor stagflation:

Weekly jobs unemployment claims:

• five-decade low; lowest level since the year I graduated from high school, 1969
• well under 200,000
• came in at 187,000
• expectation: 210,000
• analyst's top concern, the meme, "the fast-spreading sub-variant of Omicron, known as BA.2"
• or, as I would suggest, "release the kraken"
  

Definition of stagflation: link here --

• high inflation rate
• some suggest the high-water mark will be 2Q22 and then slowly drop from there
  
• economic growth rate slows: 
• of course it's going to slow; that's the Fed's hope; taking steps to slow high inflation will necessarily slow economic growth
  
• unemployment remains steadily high: not yet, and no signs that will happen.
  

Schwab conference yesterday:

• inflation watch
• recently came in at 7.91% or thereabouts; I thought it was closer to 7.9%;
• next reading could have an "8-handle"
• Schwab's perspective: that will be the high and from then on, slowly come down;
• they had a nice chart -- after a rate hike the market slumps -- time to normalize back to 100 on the market, after first rate hike:
• slow tightening: six months
• moderate tightening: six months
• fast tightening: 24 months
• two takeaways for me
• six-month buying opportunity;
• returns will definitely be less, but still "worthwhile"
  
• Schwab thinks we will see a "moderate" tightening policy
• the return on equities will be significantly slower than the last few years
• dividend-paying portfolio now in vogue.
  

First group "financial / economic" indicators:

• 10-Year Treasury: link here.Yield -- 2.377%. Up almost 6 basis points.
  
• DXY: link here. 98.79. Pretty much flat.
  
• Silver: link here. Up half-a-percent; $25.32.
  
• Gold: link here. Flat. $1,947.15.
  
• CBOE volatility index: link here. Explained at Investopedia. Continues to drop. 23.2.

EVs:

• Nikola has begun production of its first EV semi -- tractor for 18-wheeler.
• factory: Coolidge, AZ
• deliveries to begin 2Q22
• article did not provide prices or price comparisons
• intended for shorter routes; range of 350 miles
• a longer-range version; hydrogen fuel cell, is on track to begin shipping next year

US Crude Oil Days Supply Drops Below 27 Days; No Wells Coming Off Confidential List -- March 24, 2022

US crude oil -- days supply: drops below 27 days; stands at 26.6 days. Link here.

No spare capacity:

• 2022 world oil supply - demand deficit: likely to be largest in history; link here;

Now that winter is over, no one seems to care: largest underground natural gas storage in Europe is now empty; run by Gazprom. Link here.

CPC pipeline:

• the US has excluded the Chevron-led Caspian Pipeline Consortium (CPC) from its ban on Russian oil and gas imports announced this week in an attempt to leave open the export route via Russia’s Black Sea coast. Link here.
• OPEC+ appears not interested in filling the gap caused by CPC shutdown. Link here.
• the shutdown is expected to be very short-lived; maybe two months;
• wiki entry;

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Back to the Bakken

Active rigs:

$115.00	3/24/2022	03/24/2021	03/24/2020	03/24/2019	03/24/2018
Active Rigs	35	15	50	69	60

Thursday, March 24, 2022: 38 for the month, 147 for the quarter, 147 for the year
None.

RBN Energy: why US E&Ps have been slow to ramp up crude oil production.

Getting by without a few million barrels a day of Russian crude oil won't be easy for the global market, but it's gotta be done. One way to help ease the supply shortfall would be for U.S. E&Ps to ramp up their crude oil production, but the oil patch's output has remained close to flat — so far at least. 

Why aren't producers jumping in? Are the Biden administration’s policies and mixed messages on hydrocarbons putting the kibosh on production growth? Is it a scarcity of completion crews, or pipes or frac sand? Perhaps it’s worries that increasing production would send oil prices sliding and hurt producers’ bottom lines? Or is it all about ESG and the shift by many large investment funds and banks away from anything related to fossil fuels? Possibly all of the above? In today’s RBN blog, we look at what’s really behind the snail’s pace of U.S. crude oil production growth.