For The Archives -- The Blog -- March 1, 2023

The blog began in 2009. I guess I opened a twitter account about the same time, but that I did not remember.

Tonight, I see, I posted the blog has 44,000 posts.

Over at twitter, 234 followers.

Duration:

The 21st Century -- America's Century -- March 1, 2023

See 4Q22 earnings release. 

Enbridge Update: link here. Archived. See also, but archived. Enbridge pipelines tracked here.

For additional background re: the Flanagan South crude oil pipeline.

The Flanagan South Pipeline is an interstate crude oil petroleum pipeline developed by Canadian energy company Enbridge, in the US.

The 593-mile (965.6km) pipeline with a 36in-diameter runs from Flanagan, Illinois, to Cushing, Oklahoma, passing via Missouri and Kansas.

• $2.7 billion
• mooted in 2011
• project was awarded in 2013
• operational, December, 2014
• initial capacity: 585,000 bpd (similar to Keystone XL)

It delivers crude oil supply from North Dakota’s Bakken region and western Canadian region to the US Gulf Coast refineries.

The Flanagan South Pipeline follows the route of Enbridge’s existing Spearhead Pipeline from the Flanagan terminal in Illinois to the Cushing terminal in Oklahoma.

The crude oil supplied through Flanagan South Pipeline to Enbridge’s Cushing terminal is sent to Gulf Coast refineries via the Seaway Crude Pipeline System, which is jointly owned by Enbridge and Enterprise.

The Flanagan South pipeline utilizes existing pumping station sites and electrical power connections along the Spearhead Pipeline.

The new pipeline, together with the Spearhead Pipeline, transports up to 775,000bpd of North American crude oil from Illinois to the Cushing terminal, which is one of the biggest oil storage hubs in the US.

The crude oil from Cushing is sent via the reversal Seaway Pipeline to the Gulf Coast. The Seaway Pipeline system underwent a $1bn expansion to more than double its southbound takeaway capacity to 850,000bpd in July 2014.

Much, much more at the link.

Flanagan South crude oil pipeline (FSP):

• existing 585,000 bopd pipeline
• looking to add 95,000 bopd of incremental capacity
• will build the 15-million-bbl Enbridge Houston Oil Terminal (EHOT): a greenfield terminal
• 2.5 million bbls of heavy crude oil storage at a site adjacent to the eend of the 950,000-bopd Seaway Pipeline Enbridge -- owned jointly with EPD
• cost: $240 million

EHOT:

• will also have access to EPD's planned 85,000-bbl / hr offshore Sea Port Oil Terminal (SPOT)

Other:

• Enbridge has planned a total of $3.3 billion in new investments
• $2.4 billion of that will be applied to natural gas transmission modernization and utility capital
• will also acquire 35 bcf of Gulf Coast gas storage in Matagorda County, TX
• will buy Tres Palacios Holdings for $335 million from Brookfield Infrastructure Partners and Crestwood Equity Partners
• includes an integrated 62-mile natural gas header pipeline system with eleven inter- and intrastate natural gas pipeline connections, includnig Enbridge's 12-bcfd Texas Eastern pipeline.

And it goes on and on. 

All at the link.

WPX With Two New Permits -- March 1, 2023

AVGO: earnings after Thursday's close.

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

Active rigs: 45.

WTI: $77.64.

Natural gas: $2.790.

Two new permits, #39690 - #39691, inclusive:

• Operator: WPX
• Fields: Heart Butte and Moccasin Creek (both in Dunn County)
• Comments:
• WPX has two permits, one for a Marcus well, and one for a Nero well, both in NENE 26-148-93;
• one to be sited 1292 FNL and 572 FEL; and, the other to be sited 1312 FNL and 550 FEL

Three permits renewed;

• Foundation: one Barkland permit; and two Ellisson Creek Federal permits. Barkland is in Beaver Creek, Golden Valley; the Ellison Creek Federal wells are in Morgan Draw, Billings County

Three permits canceled:

• Neptune Operating: two Shaffer permits (Williams County) and one Sanders permit (McKenzie County)

Two additional permits canceled:

• based on their name change, it appears two Slawson permits have also been canceled, both Armada Federal permits, #34619 and #38687, the former a middle Bakken; and, the latter, a Three Forks.

How Inflation Early In Life Positively Affected My Financial Situation Later In Life -- March 1, 2023

For the archives. 

Not ready for prime time.

There is yet more to be written. This has not been proofread; there will be content and typographical errors.

IN PROGRESS. 

Theme: how inflation early in life positively affected my financial situation late in life.

There are so many facets to this story, but first some important backstory data points.

1.  Background:

• I was a career officer in the USAF, from 1977 to 2007, 
• officially, exactly 30 years and a day 
• (official retirement has to occur on the first day of the following month in which you accrue 30 years. 
• significant inflation was pretty much a part of my life for the first twenty years of my career
• military pay: 
• we saw pay increases every year: COLA (cost of living adjustments); the higher inflation was, the higher the COLA 
• every two years: on top of COLA, we got an automatic pay increase just for serving two more years; also called longevity pay;
• promotion: officers were generally promoted every four to eight years; for me, average time between promotions was probably about five years
• special pays (and there were lots of them)
  
• I maxed out all my promotions by twenty years which meant no more promotions after my first twenty years; no promotions in my last ten years in the service (that's why most folks retire at twenty years rather than at thirty years)
  
• after twenty years, one could retire on 50% of one's basic pay
• after thirty years, one could retire on 75% of one's basic pay
• for me, my initial pension was probably close to 50% of total final active duty pay; possibly less
  
• there were some downsides and some unfairness to this system, but that's not the purpose of this discussion; stay focused on the data points above
• in thirty years of being a career officer, my pay was never, never interrupted due to anything: no interruptions due to illness; due to injury; due to job action (strikes); due to vacations (30-day paid vacations); due to job loss;
• income was never negatively impacted by surprise medical expenses; 
• groceries and department store items sold on base at quasi-governmental retail centers
  
• geared for low- to middle income folks; no local sales tax; 
• our pay never decreased; it could only go up;
• one could supplement basic pay with other pay, often significantly significant; much of that supplemental (additional) pay was tax-free (hazardous pay, combat pay)
• I'm sure I'm missing some things, but we can start there

2. Comment.

• not specific to the military but related to the pay one makes in many careers, the more you make at the front end of one's career has a greater effect on final pay than the amount one makes at the end of one's career, if that makes sense 
• (obviously many, many exceptions) 
• in other words, if I had the choice of a 10% COLA for five consecutive years,  I would ask for it at the beginning of my career rather than at the end (I'm not sure if that works, or always works, but I think you get the idea of what I'm trying to say

3. More background.

• early in my career I had relatively few expenses compared to the expenses I would have later in life;
• moving every one to three years, difficult to buy a house early in career (a huge financial break for most folks, although that's counterintuitive
• only one family car needed;
• no college expenses or additional car expenses for teenagers until late in life

4. Now, inflation. The reason for this post.

See this post. 

• As noted, I entered the service in 1977.

• From 1977 - 1980 I was in training and money meant absolutely nothing to me. I needed no money; it all went to my wife and she ran the household. We had no time for anything: no vacations, no travel, no boating, no nothing. I was working 80+ hour weeks; age three meals a day (generally at work) and came home to sleep. That was my entire life. [Having said that, we had wonderful date nights in San Francisco on a very regular basis.]
  

• But look at that "wonderful" inflation from 1977 - 1980 -- I wasn't spending any money; I lived on base, so no housing expenses and no increase in rent -- ever -- so, inflation? What inflation? I would not have noticed it but we would have received huge COLAs every one of those years, which exceeded our "longevity" pay (every two years).
  
  
  

• And, as Buffett would say, this was the secret sauce: all subsequent pay for the next 26 years (basic pay, COLA, promotion pay, etc) was based on the previous pay which went up significantly each year (1977 - 1980) due to inflation. Inflation that I never saw.

• And now, forty-six years later (2023 - 1977 = 46) my pension is significantly more than it would have been had we not had that inflation in those early years.

• And as noted at that site, we experienced significant inflation during the first twenty years -- the most important earning years -- of my career.

• An aside: much more important than the "true" inflation rate is the "official" inflation rate. Folks at the same point in their military career as I was in 1980 see stories of what "true" inflation is, and are greatly concerned, as well they should be, that the government is cleverly doing what it takes to bring the "official" inflation rate down. A lower "official" inflation rate will reduce the COLA and basic pay and special pays and that will have a cascading effect for the next twenty to thirty years.

5. Comment.

• "Inflation" is only one factor in one's earnings and expenses. And in the big scheme of things, it's a very, very small factor. So much more affects one's net income, but if I had to say the most important factor with regard to net income and "inflation," the most important factor is the amount of disposable income, or positive revenue stream. 

• For young military officers, who by the way, receive ongoing and frequent money-management education, the best thing they can do now is invest as much as possible with an eye toward Buffett's secret sauce. The "other" secret sauce that I mentioned above will take of itself and, at any rate, is out of one's control.

Browser War: Google Vs Microsoft -- Does "Monopoly" Have One "N" Or Two? March 1, 2023

Link here.

Gasoline Demand; EV Range -- March 1, 2023

Crude oil in storage: crept up slightly. Link here: 31.8 days.

• last time we saw 32 days was back in May, 2021. 

*****************************
Gasoline Demand

Link here.

************************
EV Range 

Link here.

Only one of these matches my 2012 Honda Civic and it takes less than three minutes to "fill" that car's gasoline tank. And I can find a service station on almost every corner in town, and almost every exit on the US highway system.

Weekly EIA Report And Insulin -- March 1, 2023

Weekly EIA report, link here:

• US oil in storage remained about 9% above the five-year average, begging the question: why is "everyone" so worried about the SPR releases; and, oh, by the way, why is gasoline still so expensive if there is such a huge amount of oil in storage?
• US oil in storage increased by 1.2 million bbls last week, well below the previous report's increase but still an increase
  
• US oil in storage now stands at 480.2 million bbls and shale operators can "turn on a dime";
• imports -- yawn
• refiners are operating at 85.8% -- oh, is that why gasoline prices remain stubbornly high?
• is "our" problem too little drilling or too little refining?
• distillate fuel inventories increased only very slightly and are now 10% below their five-year average but still more than enough -- and yet, very expensive, I'm told;
  
• jet fuel: still surprising -- down 0.7% compared with same four-week period last year.

********************
Hey, On Another Note

Another win for Biden but so much more important, a huge, huge, huge announcement / concession (used in the good sense of the word) from Lilly.

Earlier this year: Biden / Medicare / insulin / $35 / month. 

Folks complained that the Biden-insulin initiative helped seniors but did nothing for the younger set.

Today, Lilly capped prices for its insulin at $35 / vial. Even less in some cases (?).

CNBC link.

From $500 / month to $70 / month -- that will go a long to help those most affected by inflation. 

There's some "small print" stuff, like private insurance, but my hunch: Amazon Pharmacy is all over this. 

If there is a "small print" glitch, my hunch: Amazon Pharmacy will have a way to solve the problem. 

How many vials does the "average" diabetic use / month?

Inflation: Through My Lens -- March 1, 2023

***********************
Historical Inflation Rates, 1914 - 2023

Link here.

 

This was pretty much the majority of that part of my adult life in which I was earning a living and raising a family, for me, 1977 - 2007. Pay particular attention to 1973 to  1976, and then again, 1977 - 1982. The year 1977 was relatively good compared to what came before and what came after. Now add in college and graduate school expenses for two daughters and multiple international trips for one. I was in the military all that time and although it was a good salary it was not great compared to my colleagues on the outside, but I’ll write more about later.

 

Now, on a fixed income:

 

And for those who prefer the alternative, 1929:

*****************************
Global Inflation

NIO: EVs Not For Me -- Look At The Margins -- Compare With Tech Companies -- March 1, 2023

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. 

Again, all my posts are done quickly. There will be typographical and content errors in all my posts. If any of my posts are important to you, go to the source.

Disruptive:

• EVs: link here. Scorecard. 

Nio: link here.

• gross margins: 3.9% in 4Q22 vs 17.2% in 4Q21 and 13.3% inn 3Q22. 
• vehicle margin: 6.8% in 4Q22; 21% in 4Q21; and 16% in 3Q22 
• loss from operations: almost $1 billion -- an increase of 176% from 4Q21 
• adjusted loss from operations: $872 million -- almost 200% more than 4Q21; and almost double that of the previous quarter, 3Q22 
• net loss: $786 million 4Q22; 170% greater than 4Q21; and 40% greater than previous quarter, 3Q2
• EPS loss: 51 cents/share in 4Q22 vs 36 cents the previous quarter, 3Q2
• gross profit: $90 million: a decrease of 63% from 4Q21; a decrease oof 64% from previous quarter, 3Q22 
• total revenues: $2.329 billion in 4Q23; a 62% increase froom 4Q21 and an increase of 24% from previous quarter, 3Q22 
• vehicle sales, deliveries: significant increase y/y; q/q
  

NIO: down 3.6% today.

 

The 21st Century -- America's Century -- March 1, 2023

Yesterday: 21st Century -- America's Century! US LNG: link here.

Today: Saudi gets it. Link here.

Today, link here.