Personal Mileage Update -- July 14, 2022

Due to driving Sophia back and forth to day camp this week, gasoline usage has increased for my 2011 Honda Civic:

date --- odometer -- gallons -- $/gallon -- total $ -- miles -- mpg -- cents / mile

15 Nov 21	121,312	6.11	3.05	18.62	203	33.25	0.09
3 Dec 21	121,581	8.21	3.00	24.63	269	32.76	0.09
January 7, 2022	121,906	9.98	2.85	28.43	325	32.57	0.09
March 26, 2022	122,088	6.42	3.68	23.62	182	28.34	0.13
June 8, 2022	122,263	6.75	4.60	31.06	175	25.91	0.18
June 21, 2022	122,435	6.20	4.68	28.99	172	27.76	0.17
June 29, 2022	122,670	7.61	4.44	33.77	235	30.89	0.14
July 14, 2022	122,901	7.65	3.94	30.31	231	30.20	0.13

End-Of-Day Odds And Ends -- July 14, 2022

Italy: Mario Draghi is resigning as Italy's prime minister. Let's see if Draghi simply forms a new coalition government. This may be a non-story. Let me correct that. This is a non-story.

Equinor: has acquired East Point Energy, a US-based battery storage developer. 

Subsidies: wind and solar will continue to need subsidies until 2040. Let me correct that. Wind and solar will continue to need subsidies until at least 2040. Link here. From ScienceDirect.com. Link here for reply and basis of concern:

SPR refill. LOL. It's not gonna happen.

• the reality is, by the time SPR releases are done, the U.S. will be producing ~ 12.6m bbls/d, refinery runs will slow down, and there will be no replenishing of SPR so unless demand is really strong, not sure we stay around $100. Link here.

Cooling: five housing markets cooling. Four in California:

• San Jose, CA
• Sacramento, CA
• Oakland, CA
• Stockton, CA
• Seattle, WA

US crude oil build: crude oil shipments across the US Gulf Coast fell by almost a million bopd to 2.5 million bopd for the week ended July 8, 2022. This would explain part of the weekly crude oil build. Lin here.

EVs:

Disruptive:

• EVs: link here. Scorecard.
  

ERCOT: 

• "Tesla sent over-the-air (OTA) notifications to drivers in Texas asking owners to avoid charging their EVs during peak hours of energy use." Link here. 
• is anyone paying attention? A handful of Teslas in Texas and the vehicles are putting "a strain" on the grid
• has anyone thought any of this through? 
• and remember, most folks charge their EVs in the "off" hours. 

Snarky comment: several weeks ago a reader was less than pleased that this inconvenient truth is already being reported -- that EVs are putting an incredible strain on the grid even though EVs are "generally" recharge at night when overall demand is less.

This Simply Blows Me Away -- Are Folks Paying Attention? July 14, 2022

I always get the impression that many (most?) Americans don't realize how tight global supplies of crude oil and natural gas are. 

In this case, either Saudi Arabia does not have the crude oil or Saudi Arabia does not have the capacity to produce more fuel oil.

It also explains why Saudi Arabia does not want to "lose" Russia as a member of OPEC+. 

Bottom line: Saudi Arabia needs oil or refined oil products to produce electricity to meet air conditioning demand.

From The Daily Star, originally an exclusive from Reuters that is now not accessible due to a paywall:

• Saudi Arabia more than doubled the amount of Russia fuel oil it imported in 2Q22
• purpose: feed power stations too meet summer cooling demand and free up the kingdom's own crude export
• obviously little spare capacity in Saudi Arabia
• import numbers:
• 647,000 tonnes (48,000 bbls per day) of fuel oil from Russia (April - June, 2022)
• up from 320,000 tonnes in the same period last year
• for the full year 2021, Saudi imported 1.05 million tonnes of Russian fuel oil
• Saudi's summer burn:
• 600,000 bpd in summer months;
• 300,000 bpd in winter months;
• increased use of natural gas has reduced the amount from as much as one million bpd in 2010
• much more at the link

The article is archived.

Elsewhere:

Oil-fired power generation has roared back this year, burning crude and products to meet strong growth in electricity demand. For Saudi Arabia and Iraq, April fuel oil and direct crude use jumped by 270 kb/d month-on-month.

CLR With Three New Oil And Gas Permits; Four DUCs Reported As Completed -- July 14, 2022

WTI: $96.28.

Natural gas:k $6.666 (great poker hand)

Active rigs: 45 or thereabouts.

Four new permits, #39087 - #39089, inclusive:

• Operator: CLR
• Field: Dollar Joe (Williams County)
• Comments:
• CLR has permits for three Colette wwells iin NWNE 18-155-96; 
• to be sited 1085 FNL and between 1429 FEL and 1519 FEL.

Four producing wells (DUCs) reported as completed:

• 38517, 1,275, CLR, Thorp Federal 7-28H1, Little Knife, first production, 5/22; t--; cum --;
  
• 38311, 1,907, MRO, Gene 44-23TFH, Bailey, first production, 3/22; t--; cum 70K 5/22;
  
• 38315, 2,573, MRO, Ferdinand 14-24TFH, Bailey, first production, 2/22; t--; cum 70K 5/22;
  
• 38664, 2,681, MRO, State Melman 34-36TFH, Bailey, first production, 3/22; t--; cum 44K 5/22;
  

Initial production;

• 38311:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	5-2022	31	23394	23328	45127	23139	22002	295
BAKKEN	4-2022	28	18701	18737	45563	18174	17082	418
BAKKEN	3-2022	29	28123	27913	82902	22798	21873

• 38315:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	5-2022	31	23755	23695	38657	22782	21660	276
BAKKEN	4-2022	28	19660	19584	35663	18654	17506	449
BAKKEN	3-2022	23	14359	14468	32231	12351	11833	0
BAKKEN	2-2022	12	12191	11975	17875	7587	7167	139

• 38664:
  

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	5-2022	29	12250	12203	25073	8655	7207	369
BAKKEN	4-2022	12	8685	8907	16648	7464	6288	402
BAKKEN	3-2022	15	23281	22947	45270	16515	14425	27

The Apple Page -- July 14, 2022

The new MacBook Air was to be available no sooner than July 15, 2022. Already we are seeing reviews. 

From MacRumors this morning:

Look how inexpensive the M1 MacBook Air is: $999. No inflation here.

**************************
TSM Earnings

2Q22 earnings.

Key takeaways:

• world's largest contract chipmaker;
• beat analysts; estimates
• EPS: $1.55 vs expected $1.44 (not trivial)
• sales: $18.16 billion vs $17.68 billion (also, not trivial)
• earnings increased by 67% (not trivial)
• sales advanced by 36% (not trivial)
• again, earnings (a 67% increase) cleared beat sales (increase of 36%)
• guidance: mid-point, $20.2 billion; well above Wall Street's consensus estimate of $18.66 billion
• TSM makes cutting-edge chips for Apple, AMD, Nvidia and QCOM

From Sophia's Sailing School Two Weeks Ago -- July 14, 2022

Without question, these are my best memories of Sophia's sailing school. For anyone who has studied sailing, or is a sailor, this "exercise" will make sense. 

Students in Sophia's sailing class were instructed to depict mainsail placement in various wind conditions.

From an ODC sailing student, an eight-year old, third grader, and who will end up frustrated when the wind does not cooperate:

Sophia's impressionist example, in which she knew that the wind never cooperates. LOL. She will never become frustrated with sailing; she knows one cannot predict the wind and one simply does the best one can do.

*****************************
This Week: Day Camp.

First day:  

Sophia says she loves "day camp" so much better than sailing. And she really, really enjoyed sailing.

Odds And Ends -- July 14, 2022

Grocery inflation watch. Update.

To be clear: the following are not in my investing future --

• ESG
• CCS
• EVs; interesting commentary here; group think starting to "scare" CEOs; 
• deep down these CEOs know EVs won't "work" as a business model;
  
• RGB (regional grid batteries); this is a no-brainer;
  
• nuclear reactors in the US; again, "my investing future," not yours.
  

As an investor: I've never been in a better mood. More on that later. We're coming closer to the "Goldilocks" moment.

As an investor:

• I'm inappropriately exuberant about the Bakken;
• I'm even more exited about fossil fuel energy in general;
• I am always fully invested;
• I have a plan and have remained disciplined;
• I learned my lesson earlier this year;
• I trade twice month: the first week of the month, and mid-month;
• I have a 30-year horizon;
• I like dividends; a lot of investors don't; I understand that
• every time I add too any position, 90% of the time my quarterly dividends will increase
• monthly dividends present a great revenue stream
• no dividends, capital gains only would be better but requires more expertise with investing which I don't have
  
• I literally have no interest / concern in short term returns 
• looking out thirty years, I see no "place" I would rather invest than in the US
  

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.

All my posts are done quickly: there will be content and typographical errors. If anything on any of my posts is important to you, go to the source. If/when I find typographical / content errors, I will correct them.

ERCOT vs ISO-NE:

• it was never about pricing with regard to ERCOT
• for ERCOT observers, it was about "will the grid hold"
• everyone knew that ERCOT would be expensive once in awhile (due to vagaries of wind and solar)
• for ISO-NE: it's never about the grid failing
• the ISO-NE (and ISO-NY) grid will never fail
• the ISO-NE (and ISO-NY) grid is all about cost: expensive - more expensive -- horrendously expensive

The book page:

• I've just completed:
• Ken Kocienda, Creative Selection: Inside Apple's Design Process During the Golden Age of Steve Jobs, c. 2018. Amazon.
• If you are a software "engineer" and have not read this book, you either:
• have too much on your plate (and can't prioritize priorities); or,
• you are not passionate about your work.

The book page:

• Ken Kocienda, Creative Selection: Inside Apple's Design Process During the Golden Age of Steve Jobs, c. 2018. Amazon.explains why Tim Cook will not be able to match Steve Jobs
• explains why it's important for Apple's workforce to return to work (and not work remotely)
• there's an easy fix for this problem
• Tim Cook needs to tie pay to inconvenience of showing up to work
• coming into work: a 50% rise in base salary with multi-year contract opportunities
• working from home: a 50% cut in base salary and contract renewals on a six-month basis;

The movie page:

• Only Murders In The Building: everyone associated with this series was nominated for an Emmy Award ... except Selena Gomez -- talk about a huge snub from the elitist white majority
• the weekly series drops at 3:00 a.m. ET on Tuesday, or right at midnight, Tuesdays, Pacific time
• ten weeks during the year; pretty much a summer series
• I can watch any one episode several times in one evening
• this week: episode 4
  

Science Day In Portland -- July 14, 2022

Home-schooling. Turned two years old about three months ago. 

Twin #1:

Twin #2:

Climate Change -- July 14, 2022

Link here.

Patrick Moore -- wiki entry.

Patrick Albert Moore (born June 15, 1947) is a Canadian industry consultant, former activist, and past president of Greenpeace Canada. Since leaving Greenpeace in 1986, Moore has criticized the environmental movement for what he sees as scare tactics and disinformation, saying that the environmental movement "abandoned science and logic in favor of emotion and sensationalism". According to Greenpeace, Moore is "a paid spokesman for the nuclear industry, the logging industry, and genetic engineering industry" who "exploits long-gone ties with Greenpeace to sell himself as a speaker and pro-corporate spokesperson".

Since leaving Greenpeace, Moore has frequently taken sharp public stances against a number of major environmental groups, including Greenpeace itself, on many issues including forestry,nuclear energy, genetically modified organisms, and pesticide use. Moore has also denied the consensus of the scientific community on climate change, for example by claiming that increased carbon dioxide in Earth's atmosphere is beneficial, that there is no proof that anthropogenic carbon dioxide emissions are responsible for global warming, and that even if true, increased temperature would be beneficial to life on Earth. These views are contradicted by the scientific consensus on the effects of global warming, which expects climate change to have a significant and irreversible negative impact on climate and weather events around the world, posing severe risks like ocean acidification and sea level rise to human society and to other organisms. 

From the twitter link:

Can't agree more.

By the way, Peter Zeihan c. 2022, has a great comparison between Illinois and Australia with regard to climate change. If I have time, I might proved that comparison.

Sweden, link here:

Tiger Woods Watch -- The Open -- July 14, 2022

Analysts in shock: "I can't believe it." "After all the preparation." "What would you be thinking right now?" "Re-group."

First hole: Tiger Woods puts ball into the water. No one has done that yet and I doubt anyone else will today, or maybe the entire tournament. Double.

Second hole: unremarkable.

Third hole: 

Fourth hole: + 4 after four.

Update: since the fourth hole for Tiger Woods, USA and The Open are losing their audience. The Open is streaming on USA. Since the fourth hole for Tiger Woods, there has been no video and no mention -- repeat, no video and no mention -- of Tiger Woods. Did he withdraw?

Wow, just after I mentioned it, they finally go to Tiger Woods on the seventh tee. He put it into a bunker off the tee shot. He remains +4 after the sixth.

Seventh hole: double bogey. Commentators not mentioning that Woods is leaning on his club while waiting to put. Many golfers do that now and then / often but this is now becoming a meme for Woods. 

Two double bogeys in first seven holes. Now the par 3 eighth. 

From a long video shot, Tiger has a very noticeable "quirk" in his stride.

Ninth hole: his first birdie. Front nine: 41.

NBC's nightmare:

• The Open turns into just another European tournament
• Tiger Woods doesn't make the cut
• in contention at the end of the third round: two Koreans
• Rory McIlroy might be the only bright spot 

Tenth hole: another bogey. +5 after ten holes. At this rate, won't make the cut.  

Eleventh hole: misses an easy birdie; pars.

Commentator actually suggests that by mid-morning tomorrow, Friday, the second day of the tournament, it may be the last time we see Tiger Woods at The Open. In other words: doesn't make the cut. 

Twelfth hole: finally, the commentators mentioned the "strangeness" of Tiger's gait. It appears it is his right leg that incurred the worse damage. Let's see if we can confirm. Google. From golfdigest right after the accident:

Tiger Woods was recovering from major surgery on his right leg Tuesday evening at Harbor-UCLA Medical Center after being involved earlier in the day in a “high-speed” single-car accident outside Los Angeles.

Woods suffered “comminuted open fractures” to both the upper and lower portions of his tibia and fibula in his right leg, as well as damage to the ankle bones and trauma to the muscle and soft tissue of the leg, according to an update released via his social-media account on Tuesday night. 

Thirteenth hole: another bogey. Plus six for the day. 

Fourteenth: birdie.

Fifteenth: par.

Sixteenth; another bogey.

The cut right now is likely to be even or at best 1+.

After the sixteenth, +6. Tied at 146 out of a field of 156, he will miss the cut and have plenty of time to enjoy meeting and greeting at great Scottish restaurants.

Seventeenth: par.

Eighteenth: par. Will start the second round, tied at 146, 6+.

Second Round, Friday

Eleventh hole: par, dropped a shot earlier; now +7 for the tournament. Will miss the cut. 

Sixteenth hole: holy mackerel. Two bunkers. The second bunker is one of those deep bunkers which has be incredibly uncomfortable for him to get in and out. Even thee commentators are lamenting how "difficult / sad" it is to watch Tiger at this point. Commentators are starting to mention things they saw with regard to Tiger before play began and during the early holes in the first round but did not mention until now. I've never seen such biased sports reporting. Will double bogey the sixteenth. Now +9.

Still no video or any mention of Mickelson or Bryson. Almost no video or any mention of Gooch who is tied for third place. 

With this kind of NBC bias, and the obvious "collusion" between the PGA and NBC, I'm having new thoughts about the LIV. 

The PGA has a cut line after the first two days. LIV has no cut.

The PGA tournaments are always four days; LIV tournaments are three days. 

NBC's worst nightmare:

• Tiger Woods won't be here this weekend. 
• viewership will plummet without Tiger
• Bryson (LIV) will make the cut; Mickelson (LIV) on the cusp
  
• a LIV player likely to win the tournament.
• another LIV player tied for 5th place.

Woods talks about his limited schedule. 

My hunch: the four majors and that's it until he retire. Four tournaments a year. He's always like the Mideast tournaments. Think of the signing bonus he would get if he jumped to the LIV: flat courses; no cut line; only three-day tournaments; and, bonuses for just showing up. He would be teamed with Mickelson, both in the autumn of their lives.  

Seventeenth: Par.

Eighteen: after the tee shot, walking across the iconic bridge. Swilcan Bridge.

Twitter Back Up -- 7:52 A.M. CT -- July 14, 2022

Links at earlier posts will be updated shortly.

Breezy and cool at poolside this a.m. It will be too breezy to go swimming this a.m.

ERCOT in great shape today.

We did not need to turn on air conditioning overnight. Woke up this morning, somewhat cool. Thermostat showed 75°F. 

Truly incredible -- watching The Open -- St Andrews Old Course. On Hulu. Completely wireless. Not really interested in first round; only reason I'm watching: Tiger Woods -- tees off about 9:00 a.m. CT.

Biden's DOJ lawsuit against the PGA came just as Biden arrives in Saudi Arabia to meet Mr Big Bucks for LIV, PGA's competitor. It's easy to forget how powerful the US president is.

Gasoline Demand -- Is This Unprecedented? July 14, 2022

Link here:

Two interpretations:

• bearish: this is even worse than it looks
• bullish: nothing to see here; setting investors up for a great 2H22

No Wells Coming Off Confidential List -- July 14, 2022

For the blog:

• a new "2022 Themes": "not the future" -- things we're not going to see despite "group think"
  
• nothing on main blog but for now a spaceholder

Bullish:

• the way WTI has performed in past thirty days has been absolutely perfect for investors
• will explain later
• Buffett has it figured out
• see RBN Energy below
  

Gasoline demand: wow!

• stand-alone post here.
• possible explanation? I don't buy it (no pun intended) 
• to be clear, I don't "accept" the possible explanation
  

Dire:

• before twitter went down this a.m., everything pointed to deteriorating conditions:
• energy situation in Europe;
• war in Ukraine;
• US economy;
• Tesla: Karpathy departs; gives no reason; amicable separation apparently;
• Tesla's head of AI is out; at The Verge;
• Karpathy is Tesla's AI
  
• Tesla without AI is just another car company -- Elon Musk
  
• PEMEX: link at twitter;
  

Wages:

• inflation: 9.1%
• real hourly wages: down 4.1%

Wages? What inflationary pressure. Link here:  real hourly earnings hit a new all-time low.

Crypto:

• third miner files for bankruptcy: Celsius
• big question: how does this affect two miners coming to MonDak?
• minor (pun intended): three bankruptcies; is this the end for crypto, or is this simply good miners pushing out bad miners? 
• worse news: depositors will lose their entire holdings.
  

LNG:

• COP to take 30% stake in Sempra's Port Arthur LNG project; link here; and, press release here;

Aluminum cans:

• as if we didn't have enough to worry about -- California's recycling program crumbles
• beer industry will struggle without aluminum cans
• affects small brewers
• almost reads like a press release from glass bottle suppliers;
• I don't see a problem
• I won't drink from a can if given a choice, and I never buy beer in a can; always bottles;
• more on this later

OXY: Buffett is nearing the "magic" 20% mark

• at 20%, everything changes
• OXY's net income expected to exceed $10 billion this year
• link here.
• at 20%, the threshold that would let it record its proportionate share of Occidental's earnings with its own results, known as the equity method of accounting.
• also owns $10 billion of Occidental preferred stock that throws off $800 million of annual dividends, and has warrants to buy another 83.9 million common shares for $5 billion.
• Berkshire uses the equity method for its 26.6% stake in Kraft Heinz Co
• OXY's share price has doubled this year
• in 2010, Berkshire bought the BNSF railroad for $26.5 billion after earlier accumulating a 22.6% stake.

Climate:

• link here at twitter;
• if accurate, it changes everything;
• stand-alone here.
  

*******************************
Back to the Bakken

Far Side: link here.

WTI: $92.50.

Natural gas: $$6.839.

NDIC GIS map: remains in-op.

Active rigs: 45 or thereabouts.

An incredibly tough North Dakota win six months ago:

• Saturday, July 16, 2022: 13 for the month, 13 for the quarter, 352 for the year
• None.
• Friday, July 15, 2022: 13 for the month, 13 for the quarter, 352 for the year
  
  None.
  
• Thursday, July 14, 2022: 13 for the month, 13 for the quarter, 352 for the year 
• None.

RBN Energy yesterday: E&Ps shower cash on shareholders as cash flows rise with soaring oil and gas prices.

Just two years ago, the onset of the pandemic slashed the share prices of many oil and gas producers and the idea of parking cash in a U.S. E&P seemed to make as much sense as leaving your Porsche on a midtown street with the keys in it and the motor running. But times — and commodity prices — have changed, and hydrocarbon producers have transformed themselves into cash-flow-generating machines that attract the sagest investors. Want proof? Warren Buffett’s Berkshire Hathaway recently purchased another 10.4 million shares of Occidental Petroleum (Oxy) for over $500 million, bringing its stake in the company to a substantial 16.4%. In today's RBN blog, we detail how the major U.S. E&Ps are allocating their cash flow to keep investors happy.

What a difference two years makes! In our July 2020 blog Stayin’ Alive, we discussed Oxy’s chances of recovering from the massive $36.5 billion debt it had accumulated in its ill-timed $58 billion acquisition of Anadarko Petroleum just before oil prices started to plummet in mid-2019. With its investment rating reduced from investment grade to junk, the company slashed its quarterly dividend from $0.79/share to a token $0.01, cut capital spending, and launched a major divestiture program. But soaring commodity prices have subsequently bailed out Oxy and the industry. Embracing fiscal discipline and eschewing production growth in favor of cash generation, E&Ps are transforming into significant yield vehicles — a turnaround that's led to a fivefold increase in the S&P E&P stock index. Producers who survived the pandemic with strong balance sheets, such as Pioneer Natural Resources, Diamondback Energy, Devon Energy, and EOG Resources, are already providing 10%-plus annual returns through a combination of regular and variable dividends and share repurchases. Others, like Oxy, have channeled growing cash flows to meet debt-reduction targets as they transition to significant shareholder returns.

RBN Energy today: refinery shutdowns around the world, part 2.

We often tend to focus on the U.S. refining picture, but, just like crude oil, refined products trade globally, and international closures ultimately have the same effect as domestic ones on the worldwide products market. Recent international closures have been distributed throughout the world — concentrated in developed countries, including several in Europe, as well as Japan, Singapore, Australia and New Zealand, but also in some developing economies like South Africa and Sri Lanka. Most of these capacity reductions were driven by the same forces as in the U.S., namely, poor economics as a result of the pandemic-lockdown-driven demand plunge in 2020 and 2021, as well as expectations that margins would take a long time to recover post-COVID. Of course, worries that the energy transition and policies to that end would suppress demand in the long-term also played a key role, as did some fundamental competitiveness issues at individual facilities. In today’s RBN blog, we take a closer look at the more than 2 MMb/d of international capacity closures since 2019.

Twitter Is Down -- 7:10 A.M. CT -- July 14, 2022

I was able to log into twitter on my iPad this morning but not on my laptop on Firefox, Safari, and Chrome.

WSJ op-ed this morning: twitter's lawsuit again Elon Musk probably won't be successful. Company won't be able to show damage; shareholders were never part of the deal.