The Million Dollar Way (The Bakken Oil Blog): Today's Focus: EVs And Chips -- June 10, 2023

Locator: 44895B.
Locator: 44895LEGO.

Updates

June 15, 2023:

A reader asked me about this note in the original post:

Two stories side-by-side:
Vietnam blackouts: link here.
MDU Ellendale, North Dakota: link here.

My not-ready-for-prime-time reply:

The point of the blog: data processing centers (DPCs) the next big thing worldwide and certainly in the US (Nvidia makes chips for DPCs -- this was the huge announcement by the CEO after earnings came out -- basically when he said - "you haven't seen nothin' yet") -->

Those PDCs use a huge amount of electricity. A huge amount.

And they generate lots of heat. Optimally, they need to be sited where it's cold.

Why else does a huge company site a huge DPC in Ellendale, ND, population, 1,000?

This one site will use 27 or 28% of all the electricity MDU generates. I could/couldn't care less about MDU.

What I'm trying to point is a macroeconomic data point: tech companies in the DPC sector are going to site their plants where electricity is cheap and endlessly available and where it's cold (ambient outside temperature).

And the cherry on top: site these plants where there is a friendly business climate.

ND has one of the best business climates. ND will approve anything that generates revenue.

DPCs don't cross state lines like pipelines -- the permitting is only a state issue, not a public issue.

DPCs, after built, need one individual to run them. The guy that opens and closes the front door when engineers show up to update something.

Even the meter reader won't trek out to the site: that information will be sent electronically to MDU.

So, my post was not an MDU story; it was not necessarily a North Dakota story. It was a story that ZeroHedge highlighted -- but they were looking at it through their "environmental sustainment glasses / lenses." They need to look at these stories through their energy glasses / lenses and where energy will be endlessless available and cheap. This won't be in Europe and it won't be in Asia.

I look for DPCs across the entire northern tier -- Montana, South Dakota, North Dakota.

MDU, OTTR, BKH -- will benefit, but not much in the big scheme of things. MDU, OTTR, BKH won't have the MOJO, YOLO, FOMO that Nvidia, for example, has and we're in a momentum-driven (MOJO) market right now.

Having said that, I could see a large Florida utility or. a North Carolina utility buying a utility in ND, SD, MN.

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101 Days Of Summer

Day 14.

Windy and breezy. On a scale of 1 - 10, a six (6).

In a couple of hours it will deteriorate to a two (2) and by the afternoon, it biking weather, on a scale of 1 - 10, will be a one (1).

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US Economy

Big stories this past week:

Fed likely to "skip" June but will continue with more rate increases later in the year
US recession outlook moved to the right, to early 2024. Link here.
US market officially back in bull market mode. Link here.