Clearing Out The In-Box -- October 5, 2019

Jobs in America: record number employed; unemployment rate best in 50 years; folks are actually asking "how low can the unemployment rate go?" Mainstream media's headline: job growth slowing down. Well, duh. Unemployment:

• for whites: 3.2%
• adult men: 3.2%
• adult women: 3.1% (will go lower if Biden's plan to bring 720 million women back into the workforce)
• teenagers: 12.5%
• Asians: 2.5% (no typo: 2.5%) -- I find that interesting that Asian unemployment is actually lower than "white" unemployment -- reverse discrimination? Harvard has a plan to stop that, I know.
• Hispanics: at 3.9%, a record low; has never been this low; never;
• African-Americans: maintains record low of 5.5% set in August

Less than a week away, 10/10/19:

Apple: strong demand for the new iPhone 11;

• here; 

Pacific Northwest: looking forward to higher gasoline prices; link here at Platt's --

• west coast refineries operating at just 78% of capacity
• the lowest since November, 2016
• almost 20% lower than this time last year
• why: can't get enough crude oil
• why: Pacific Northwest limiting CBR
• much more at the linked site

Wind capacity in the US: EIA link here, September 27, 2019;

So, how do you interpret this headline (link here):

At the linked article:

• 3,204 MW of solar gas canceled in ERCOT
• 284 MW ok'd for operation -- 
• yeah, that's what I thought; "284" is such a small number, I thought it was all wind/solar; wrong
• I thought was solar
• nope, here's the data:
• fifteen projects (wind, solar, natural gas) were canceled in September
• two projects went forward
  a 100-MW natural gas plant
• a 184-MW wind farm (at 25% likely production, translates to 46 MW)

Later: regarding the ERCOT story above, I was "appalled" to the degree which the ERCOT folks would try to spin this story. Apparently another reader saw the very same thing; that reader wrote me:

The quotes trying to make this great news for solar seems to be a real stretch.

Of the 3,204 MW of generation canceled in September, 2,491 MW was solar and 713 MW was gas-fired. Manan Ahuja, S&P Global Platts Analytics manager of North American Power analytics, noted that the number of projects canceled was not unusual, exactly equal to last September's project cancellations.

I first saw that story at twitter:

Fake news: "jobs drying up in the Permian" -- read the story to see for yourself and if still confused, read the comments; first hint that it's fake news -- it's an "oil" story by Bloomberg

Social Security:

• for all those folks who were worried that "Social Security" would run out of money, not gonna happen; need proof? 
• politicians who make the Social Security laws are now looking at increasing benefits across the board; 
• it's going to be hard for a senior to vote "against" Pocahontas when she promises an increase of $200/month for all Social Security recipients;
• Paul Krugman: debt doesn't matter; 
• the story is not in some left-leaning tabloid; it's in The Wall Street Journal;

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

Investing: will Enbridge (ENB) beat estimates again? Clickbait: the article doesn't give estimates for the 3Q19 report, unless I missed that, which is very possible. So, what are estimates for ENB this quarter?

• mean estimate: 39 cents (EPS last quarter: 50 cents)
• high: 42 cents
• low: 30 cents

For the next fiscal year:

• range: $1.60 to $2.15
• mean estimate: $2.00

Do you really want to park your Tesla in your garage, attached to your McMansion? Unless you have a mother-in-law bedroom above the garage? Link here.

• Close reading of the article suggests that "over-charging" the batteries is the problem. Tesla fixed that problem by over-the-air software updates to prevent over-charging. The updates reduced the range of the involved Teslas by 25 miles. 
• Murphy's law of EVs: when you have but 20 miles range remaining, the map reveals the next EV charging station 25 miles away.

Best quote of the day, from a reader: "I hope Ruth Bader Ginsburg lives long enough to see Trup re-elected."

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For The Granddaughters

DAPL Vs Port Of Vancouver -- Oh, How Sweet It Is -- March 1, 2017

Updates

March 8, 2017: Port Commission votes 2 - 1 to keep port project "viable". Up to state to determine whether it will be approved.  

Original Post

 
The Columbian has the story. If the DAPL becomes reality, is crude-by-rail to the west coast -- e.g., the Port of Vancouver -- dead?

Bakken Crude Oil Receiving Terminal Proposed For Washington State -- Expand An Existing Facilty -- November 26, 2016

From OregonLive: company wants to expand existing methanol facility in Washington State to receive up to almost 18 million bbls/year; data points:

• terminal in small city of Hoquiam, Washington
• existing methanol facility
• operated by Contanda (this is new name; originally: Westway Terminal)
• 17.8 million bbls oil/year
• storage: up to 1 million bbls of crude oil
• Bakken oil or diluted bitumen from Alberta
• from Hoquiam, would be transferred to ocean-going tankers/barges to refineries in the Puget Sound area or California
• local groups oppose
• permit originally issued in 2013
• appeal: permit rescinded
• process began again in 2014

Hope springs eternal.

A typical unit train carries around 85,000 bbls of crude oil. Eighteen million bbls / 85,000 bbls = 210 unit trains, or close to one unit train daily, Monday through Friday.

Huge thanks to a reader for sending me the link. I would have missed it. 

How Oil Is Formed -- A Note From Jones Oil Ireland -- March 23, 2016

This is kind of cool. I just received a personal note from "Kate" at Jones Oil Ireland -- a 100%-Irish company delivering oil and refined products to the counties in Ireland. She sent me a link to their site, "How Oil Is Formed." She must have known I used to teach as a substitute school teacher at the middle and high school levels.

Update, 1:56 p.m.: see first comment -- Jones Oil Ireland suggests that "we" will run out of oil in about 50 years. They must not have heard of the Bakken. Another Geico Rock Award nominee?

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RBN Update On Bakken CBR To The West Coast

Pacific Northwest

Link here. 

West Coast market

• somewhat different than the rest of the US
• WTI vs Alaska North Slope (ANS) delivered to Long Beach, CA
• ANS: the default crude processed by west coast refineries
• if Bakken crude sells at a significant enough discount, CBR is economical
• this post focuses on Pacific Northwest
• later, RBN Energy will focus on California
• much of CBR delivered to the PNW comes from the Bakken
• California CBR mostly from Canada, New Mexico, the Rockies (Bakken?)

PNW

• five (5) refineries -- all located in Washington State
• total refinery capacity: 647,000 bopd
• all process ANS
• no pipeline network to deliver US inland crude to the PNW
• Five refineries (now/future Mb/d):
• Tesoro: 50 / 120
• BP: 60 / 234
• Phillips 66: 30/101
• Trailstone (US Oil Refining): 40 / 42
• BP: 0 / 65 -- held up by Environmental Impact Study

Recently:

• Bakken: $37.24
• ANS: $39.26 (apparently that includes the sea-going tanker rate)
• Bakken CBR: add $10.39/bbl)
• thus: an $8 penalty to use Bakken oil

Take-or-pay / other long-term commmitments

• other "incentives" keep Bakken CBR moving to the PNW 

Bakken CBR To Pacific Northwest -- Update, RBN Energy -- Wednesday, March 23, 2016

Active rigs:

	3/23/2016	03/23/2015	03/23/2014	03/23/2013	03/23/2012
Active Rigs	32	104	198	187	206

RBN Energy: CBR from the Bakken to the northwest is alive and well. More detailed look here if that link breaks.

Most of the crude by rail  (CBR) shipments to 4 refineries in Washington State are ex-North Dakota from where rail freight costs are over $10/Bbl. Bakken crude from North Dakota competes at Washington refineries with Alaska North Slope (ANS) shipped down from Valdez, AK.

Back in 2012 ANS prices were more than $20/Bbl higher than Bakken crude – easily covering the rail cost. In 2016 so far the ANS premium to Bakken has averaged well below the $10/Bbl freight cost making CBR shipments uneconomic. But as we discuss today - Northwest refiners are still shipping significant volumes of crude from North Dakota.
Recap

This is Part 6 in our series updating the sorry state of the CBR business in North America in 2016 compared to its heyday a few years back.

In Part 1 of this series we noted CBR declines in response to narrower spreads between U.S. domestic crude benchmark WTI and international equivalent Brent. The lower spreads reduce the incentive to move crude from inland basins to coastal refineries by rail because the latter is a more expensive transport option compared to pipelines. CBR became a big deal when WTI was discounted to Brent by upwards of $25/Bbl in 2011 and 2012 because of congestion caused by a lack of pipeline capacity. Back then it made sense to use rail to get stranded crude to market. As a result U.S. CBR shipments grew from 33 Mb/d in January 2010 to a peak of 928 Mb/d in October 2014 (according to Energy Information Administration - EIA). As new pipelines have been built out to provide less expensive options to get stranded crude to market so the WTI discount has narrowed and CBR traffic has declined. Primarily in response to the narrowing spread – overall CBR volumes fell during 2015 but not as fast as you might expect – dropping only 30% between January and December 2015 (latest EIA data) even though spot market economics for rail shipments often made no sense.

As we discussed in Part 2 – looking at the epicenter of the CBR boom in North Dakota – the slower than expected decline in rail shipments is mostly because committed shippers and refiners continue to use rail infrastructure that they invested in (and made take-or-pay commitments to) and because some routes do not have pipeline access (East Coast and West Coast).

In Part 3 we looked at CBR traffic out of the Niobrara shale region in the Rockies. Midstream companies continue the build out and expansion of rail terminals as well as new pipelines in this region even though production has leveled off. In Part 4 we looked at the fate of CBR load terminals in Western Canada that are “overbuilt and underutilized”. In Part 5 we turned to CBR market destinations – beginning with the East Coast. This time we begin a two-part look at CBR unloading on the West Coast.

Look West! The Saga Continues -- January 3, 2016; Note How The Anti-Oil Faction Writes This Story

The Olympian reports that Union Pacific could ship one million gallons (yup, gallons) of Bakken crude each week:

Trains operating on Union Pacific Railroad lines through Lewis and Thurston counties could be carrying 1 million gallons of Bakken crude oil weekly, according to a notification issued in early December and highlighted by Lewis County Emergency Management last week.

The rail line previously didn’t report transporting that much oil per train.

Thurston/Lewis county are in western Washington state with Seattle, Tacoma, and Olympia in the area. Lewis County is south of Thurston County, sort of in between Seattle-Tacoma-Olympia (to the north) and Portland (to the south).

I track the "Look West!" series here.

Again, this is an interesting way for an anti-oil newspaper to post the numbers. NO ONE measures the amount of oil being transported by rail (CBR) in gallons. In barrels, one million gallons = 24,000 bbls -- a pittance in the big scheme of things. The Bakken produces 1 million bbls//day.

A typical unit train has 118 the tank cars. Each tank car holds about 714 bbls --> 85,000 bbls/unit train. If that is accurate, it won't even take a unit train to transport 24,000 bbls. Maybe 30 tank cars. The Olympians won't even notice them.

And the article continues:

Union Pacific lines expect no more than one train per week carrying 1 million gallons of oil or more to pass through Lewis and Thurston counties. Most trains are enroute to the Portland-Vancouver area.

Union Pacific issued a notification in June 2014, stating the company did not transport enough Bakken crude oil to meet the threshold at that time.

Burlington Northern Santa Fe’s last notification was released in September, stating it was transporting an estimated 10 to 18 trains carrying 1 million gallons or more of Bakken oil through Thurston and Lewis counties.

Hardly worth noting except .... the "Look West!" saga continues.

A DOT-111 tank car carries upwards of 35,000 gallons (830 bbls). One million gallons / 30,000 gallons = 33 tank cars.

Wandering Star, Lee Marvin

Read more here: http://www.theolympian.com/news/local/article52662135.html#storylink=cp

Read more here: http://www.theolympian.com/news/local/article52662135.html

Reason #4 Why I Love To Blog-- November 12, 2015

Updates

November 16, 2015: a reader responded to my thoughts on CBR to the west coast, below:

I'll bet $10 against your penny that except for other than minor expansions at existing ports nothing will be built in the next 10 years. This is a report from Paso Robles, CA, central coast California:

In the town south here, Templeton, CA, the train goes right along side the school. No one ever thought that was bad place for the school...until they heard about CBR. It is absolutely positively the hottest discussion topic here in Paso..."we can't allow THAT."

There's a small refinery about 30 miles southwest of here that exports all of it's product to the far east...."we don't get ANY benefit from it."

A few miles farther south is the deeply liberal college town San Luis Obispo home of Cal-Poly, the tracks goes right through the heart of the city.

This is the land of fruit and nuts, and Oregon and Washington are fruit-and-nut wanna-be's. With the newly-elected liberal government in Canada crude oil exports from British Columbia are out of the question.

My understanding is that most of the crude into California is via tankers, mostly from Alaska...which will soon be a thing of the past. We'll just have to ship it in from Mexico and South America...probably add $1.00 a gallon, so we pay $2.00 more per gallon than the rest of USA...not a problem.

Morro Bay is 25 miles west of here - where a huge, maybe 500 MW gas-fired, power station sits idle...as it has for many years. Meanwhile, this past week, plans were announced to build a wind farm 50 miles offshore from Morro Bay.

(Trump thinks people in Iowa are stupid...wait until he checks out California).

Original Post

 

On November 7, 2015, once the Keystone XL was officially dead, I posted this:

Commentators are looking east when they should be looking west. The tea leaves tell me that California is in a world of pain when it comes to oil. The Bakken contributes a small amount, but a significant amount of oil, to California, but with the loss of the Keystone, and the likely loss (and definite delay) of the Sandpiper and the Dakota Access, this is an incredible opportunity for Enbridge CBR and Warren Buffett CBR to start looking at increased shipments to the Far West. Again, all things being equal, California is going to need more Bakken oil.

At the time I wrote it, I was aware that CBR destined for California would go through the Pacific Northwest.

A reader sent me this story this evening, in which Puget Sound Business Journal is reporting just that:

A new report from research group Oil Change International, commissioned by Seattle-based nonprofit think tank the Sightline Institute, found that in Keystone's absence, the oil industry will now likely turn to massive oil-by-rail terminals proposed across the Pacific Northwest as a second-best alternative for transporting the commodity.

Much more at the link, but the point is made.

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A Day Late, And A Dollar Short

I guess it was "Back To The Future" day a few days ago; I missed it -- "a day late, and a dollar short." But I went out and bought the entire trilogy in a metal case at Target a week ago, and finally got around to watching it this week. I watched it over the course of three evenings, and finally finished it tonight. I had forgotten how really good it was. (I'm not sure if I will watch the two sequels; I generally don't care for sequels). I am quite impressed how well the movie holds up over the years. I haven't watched the extras yet; it will be interesting to watch some of the extras.

Update On New CBR Tank Cars -- Washington State -- October 12, 2014

From a reader (I don't recall having previously posted this link), Fox Business is reporting:

A refinery in northwest Washington state says it will no longer accept any volatile North Dakota crude oil unless it arrives on newer-model tank cars.

By the first week of October, the BP Cherry Point facility had stopped using pre-2011 standard tank cars, known as DOT-111 cars, for the shipments, The Bellingham Herald reported (http://is.gd/XmHxHN ).

The National Transportation Safety Board, which recommended upgraded regulations for crude oil and ethanol cars in 2011, is working on updating rail safety standards and could require companies to phase out the DOT-111 cars for shipping crude oil during the next couple of years.

Cherry Point was already using newer, safer tank cars to receive about 60 percent of its crude oil, but expedited the switch to the newer cars in response to community concerns, BP spokesman Bill Kidd said. The refinery now uses a fleet of about 700 newer cars, called CPC-1232s.

The newer cars have thicker shells, head shields on both ends and improved valve protection.

Of course, not everyone agrees that the new cars are that much safer (at the linked story).

Also note "ethanol" in the story. 

And folks should find this interesting:

About 70 percent of the crude-oil rail cars that BNSF Railway currently moves through Washington state are already the newer design, railway spokesman Gus Melonas said.

For two decades, the Cherry Point refinery received crude oil only by pipeline, Kidd said. It later added shipments by sea.

But Alaskan crude oil has turned into the last type the refinery is interested in because of the higher price. Crude oil from mid-continent shale formations has become a cheaper option for the refinery, Kidd said.

"It's completely turned the industry on its head," Kidd said. "Without access to crude by rail, this refinery cannot compete."

Note the tag, CBR_WashingtonState, for other articles about CBR/Washington State.

Why Did The Chicken Cross The Road; Up To 100 People Now On Ebola "Watch" List In Texas; October 2, 2014

Why did the chicken cross the road? It was the shortest distance to the other side.

Why build an oil terminal in Vancouver, Washington? It's the shortest distance to San Francisco.

A reader sent me the story (thank you). Puget Sound Business Journal is reporting:

Vancouver is the nearest point to the Bakken oil fields of North Dakota to load a ship bound for West Coast refineries.

For those concerned about oil train derailments and the environmental mayhem they cause, Vancouver helps mitigate the risk.

“If you start in North Dakota, (Vancouver) is the closest place you can get to load onto ocean-going vessels. The Port of Vancouver minimizes the amount of miles crude goes by land,” said Rick Weyen, vice president for logistics for Tesoro Corp. and vice president for operations for its logistics.

Oil producers are scrambling to create the infrastructure to get the Midwestern-sourced oil to refineries. The infrastructure to the East Coast, South and Gulf Coast is fairly well established, but the West Coast is underserved.

“The West Coast is kind of the missing piece,” he said.

Declining production from Alaska’s and the West Coast refineries need the Midwestern products.

Oil began moving to the coast by rail in 2013 — about 150,000 barrels a day or one percent of total demand.

Weyen said rail is the most effective way to move crude oil. Pipelines cost billions to build and generally depend on buyers willing to enter long-term agreements. No shipper is ready to commit to a 10-year contract, he said.

Politically, he said, there is no way to get a pipeline from North Dakota to the West Coast.

Weyen said Tesoro pursued the chance to develop a terminal at the Port of Vancouver USA in part because of the port’s $175 million investment in rail upgrades. The venture would handle up to four trains per day, with oil transferring to double-hulled, U.S.-flagged tankers bound for refineries in California.

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Ebola

It started with two on the "watch list." It quickly went to 10, where it was this morning. It's now up to 100. Will the affected Dallas public school be closed for 21 days? No way, but I bet there are discussions. And now we have a steady stream of US airmen and US soldiers going back and forth between West Africa and the US.

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Something Doesn't Add Up

Everyone "knows" that the only way to become infected with Ebola is through direct contact with bodily fluids from someone ill with the disease. So, how does an NBC free-lance camera man come down with Ebola. If he denies coming in contact with any infected bodily fluid, this is more worrisome than we are being led to believe. 

Port Of Vancouver Presentation From The Williston Economic Summit -- September, 2014

From the Williston Economic Summit -- 2014, "Port of Vancouver."

Slide 6 -- an eye-opener. Note all the crude oil pipelines in the west (Washington state, Oregon, California, Idaho, Montana, Nevada, Colorado, Utah, Arizona, and New Mexico). After looking at that slide, then vote on the poll regarding CBR at the sidebar on the right.

Slide 8: cost to ship crude oil over next two years -- California, by rail, $13 to $15/bbl; Bakken rail to Cushing, $9/bbl; Alberta to east coast by rail, $9 to $12/bbl. By ship, Brent to the US, $0 to $9.

 Slide 9: Bakken crude by rail to San Francisco ($13/bbl); to Los Angeles ($14/bbl) -- remember, there are no pipelines to California

Slide 10: West Coast refineries increasingly dependent on foreign oil

Slide 11: by 2025 -- zero oil from Alaska North Slope -- an incredible slide

Slide 12: opposition in California to CBR is growing ... do you see where this presentation is headed ..? Remember, this is a "Port of Vancouver" presentation.

The most important data this presentation did not share: the likelihood that California in-state crude oil production could also decline significantly. It was touched on in slide 13, but easily overlooked. At best, there is no increase in California oil production from now to eternity.

Paradigm Shift: Big Oil + Big Coal = Big Energy = Big Rail

From Crosscut.com/Seattle, an article with an activist environmentalism slant perhaps, but a good article none-the-less to help folks stay aware of energy issues facing coal in Montana/Wyoming and oil in the Bakken.

My takeaway: the activist environmentalists are struggling to come to terms with the tsunami of American fossil fuel -- coal and oil. Killing the Keystone aggravated the entire rail system in the United States. Talk about unintended consequences.

Crude oil derailments. I was correct. The mainstream media cannot come up with any deaths caused by crude oil derailments in the United States, and the only one in North America was due to an engineer failing to set the brakes once the train had completed its "trip" for the day. Rational folks have trouble instituting even more stringent rules when that's all they have:

Oil trains scare people who live anywhere near the tracks. The most recent crash — in North Dakota — brought flames and smoke, but no injuries. A July explosion in Lac-Magentic, Quebec, killed 47 people. Other crashes have led to evacuations, but not hospitalizations. The problem, oil executives say, is a lack of pipelines to ship crude. TransCanada, which would build the Keystone pipeline, said this month that it will look to rail instead.

The other takeaway: money will win out.

The last takeaway: presidents come and go, but energy needs will continue, and probably increase.

Third CBR Terminal Proposed For Washington State Coast

The Billings Gazette is reporting:

U.S. Development Group is seeking permits to build an oil terminal on the Washington coast that could handle about 45,000 barrels of crude oil a day.

The $80 million proposal at the Port of Grays Harbor is one of several in Washington that together would bring millions of barrels of oil by train from the Bakken region of North Dakota and Montana.

The increase in oil shipments by rail have raised concerns about public safety, the potential for oil spills and the ability of local communities to respond to accidents.

About 17 million barrels of oil were shipped across Washington state last year - mostly to refineries in Anacortes and Cherry Point near Bellingham. That number is expected to triple this year, according to U.S. Sen. Patty Murray, D-Wash., who chaired a congressional hearing Wednesday on oil shipments by train.

Anyone taking any bets?