Train Derailment -- March 5, 2015, Galena, Illinois

Link here. 

Local responders say eight cars derailed this afternoon about three miles south of Galena.

Galena City Administrator Mark Moran said Galena fire crews responded to reports of a derailment early this afternoon.

"The report that came back to me from them is that eight tanker cars had left the track," he said. "Two of those were still upright, the other six were not. They observied at least one of those tankers smoking." 

"I did confirm that the train crew was safely removed from the scene without injury," he said. 

BNSF has released two statements regarding the derailment, but has not confirmed reports of burning crude oil at the crash site. A company spokesman did not respond to questions about the type of tanker cars and oil being transported.

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Speaking Of Trainwrecks

The ObamaCare case is now being written by the Supreme Court.

ObamaCare will survive, 5 - 4 or 6 - 3, and even possibly more lopsided.

The clue at The Washington Post:

Boiled down, it says that when a law is ambiguous, judges should defer to the agency designated to implement it so long as the agency’s decision is reasonable.

This will be the "out" the Chief Justice needs. He wanted a "united" court and it looks like he's working hard to build that consensus.

And that's why these guys get paid the big bucks.

Thursday: $75 Billion Monthly Stimulus To Continue; Congress Passes Budget; Insurers Extend Grace Period; Market Surges Almost 300 Points; Unemployment Claims Surge Due To Holiday Distortions. LOL

Active rigs: 189

RBN Energy: Natural gas conversion challenges in New England.

While most of the country is enjoying the benefits that low cost North American supplies of natural gas bring to local and regional economies, many parts of the Northeast US and Atlantic Canada are still heavily reliant on expensive oil-based products for residential, commercial and industrial use. That is in spite of the proximity of burgeoning supplies of natural gas in the Marcellus and Utica shale basins. The challenge in converting users away from oil lies in infrastructure build out and deciding who will pay. Today we begin a two part series on the slow conversion process and new solutions to supply natural gas to customers before pipeline infrastructure is built.

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I'm not in a good mood today. I am unable to connect on-line to my Target account. I will be canceling my Red Card today.

For Investors Only

Disclaimer: this is not an investment site. Do not make any investment decisions based on anything you read here or think you may have read here.

A couple of days ago I said there were three things weighing on investors and how I felt about them. This is what I wrote:

Three things weighing on the market:

• Federal budget compromise -- not yet a done deal. Just political theater. It will be passed.
• could the Fed announce tapering this week? Nope.
• will ObamaCare's disarray have significant effect on the US economy in 2014? Yup.  

Update, today, my thoughts: 

Three things weighing on the market:

• Federal budget compromise -- it was passed. Sent up to President Obama.
• could the Fed announce tapering this week? Yes, if one thinks $75 billion (vs $85 billion) monthly is tapering; inconsequential.
• will ObamaCare's disarray have significant effect on the US economy in 2014? Yup. But insurers slow-roll the administration; agree to pay insurance claims for first ten days of January, 2014, if policy-holders pay first premium by January 10, 2014. I guess the extension is from December 23, 2013, to January 10, 2014.
• So,what did the market do while I spent the day at the Getty Museum in west Los Angeles yesterday? Up almsot 300 points. Futures today suggests it will hold those gains for the most part and oil will melt up.

Speaking of Obamacare: this story is gaining traction. Federal exchange may be illegal under the law. The law clearly states that only state exchanges can offer health insurance premium subsidies.

Jobless claims: the spin is in high gear.  Bloomberg says unemployment claims surge on year-end / holiday distortions. I guess the highly paid Wall Street analysts forgot a) Christmas comes every year; b) the year ends every December 31. This is quite an incredible story.

New Jersey credit rating lowered. Probably the end of the presidential talk for the governor, a RINO.

The Wall Street Journal

Stimulus will continue. Feds will maintain zero-interest rate through 2015. Market surges almost 300 points.

Target Red Card hit by data breach. Unable to access account. 

The Los Angeles Times

Target Red Card hit by data breach. Unable to access account.  I will stop by customer service this morning.

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Unions need to give the public a break.

Even in deep blue California, where Democrats dominate, organized labor is losing public popularity.

That's a general statement, based on nonpartisan polling.

Specifically, public employee unions are tarnishing all labor, according to the pollster.
He pinpoints pension envy: public employees pulling down generous retirement benefits that private sector taxpayers began losing years ago. That's the long-term public gripe.

And recently in the traditional labor stronghold of the San Francisco Bay Area, voters have especially soured on unions because of two very annoying public transit strikes.

It's interesting: huge union story in The LA Times and SEIU is not mentioned. Speaks volumes.

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Back to the e-mail and the news. 

Something new in Bakken reporting. I had not see this before. WPX with an annotation in the well file report suggesting that 16 stages in this particular well was equivalent to 31 stages. Really?

• 24463, 1,592, WPX, Adam Good Bear 15-22HD, Van Hook, 16 stages; 3 million lbs, t6/13, cum 52K 10/13; comment: 16 stages = 31 equivalent stage.

Mark Perry: great graph on US energy revolution, due to shale. 

From Rigzone: Pennsylvania is the fastest growing natural gas producer due to the Marcellus.

From an MDU press release: MDU increased its earnings guidance for 2013. Adjusted earnings per share for 2013 is now projected in the range of $1.45 to $1.50, an increase from prior guidance of $1.35 to $1.45. GAAP earnings guidance is in the same range.

Friday And The World Series Is Tied 1-1; ObamaCare Could Unravel In 36 States (Of Course, ObamaCare Was Never Raveled In The First Place)

Disclaimer: this is not an investment site. Do not make any investment decisions based on anything you read here or think you may have read here. 

Updates

December 11, 2013: update on the Buckeye acquisition --

Buckeye Partners announces acquisition of 20 liquid petroleum products terminals with total storage capacity of approximately 39 million barrels for $850 million from Hess: Co announced that it has completed its purchase of 20 liquid petroleum products terminals with total storage capacity of approximately 39 million barrels for $850 million from Hess Corporation. The 19 domestic terminals are located primarily in major metropolitan locations along the U.S. East Coast and have approximately 29 million barrels of refined petroleum products storage capacity, including approximately 15 million barrels of capacity strategically located in New York Harbor. The terminal on St. Lucia in the Caribbean has approximately 10 million barrels of crude oil and refined petroleum products storage capacity and has deep-water access. This acquisition increases Buckeye's total liquid petroleum storage capacity by approximately 53 percent to over 110 million barrels. Hess' Retail Marketing Business will be a key customer at these facilities under a multi-year storage and throughput commitment.

December 3, 2013:  Motley Fool mentions Buckeye as a company most to benefit from the Panama Canal expansion. Buckeye is mentioned in the original post below. From the linked Motley Fool article:

Not content to move energy across the U.S., Buckeye Partners expanded its operations to serve the Latin American market. With the Panama Canal expansion, the Asian markets now present a viable opportunity as well. Two recent acquisitions made all this possible. First, the 2011 purchase of terminals in the Bahamas. Second, the soon to be closed acquisition of terminals from Hess. These Hess terminals give Buckeye an expanded presence in New York Harbor, Puerto Rico, and the southern U.S. seaboard.

Why did Buckeye buy the Bahama and Puerto Rican terminals? I suspect two reasons. First, the terminals are strategically located for transport of crude oil and various refined products between the U.S. Gulf Coast, the U.S. East Coast, Europe, and Latin America.

Again, the enlarged Panama Canal opens the door to Asia and the U.S. West Coast.
Second, the U.S. government makes it expensive to ship oil or other products directly between U.S. destinations. Specifically, to ship oil directly between U.S. ports, you must use U.S. registered ships, comply with U.S. regulations and use only U.S. crew members. By shipping oil to the Bahamas or other foreign destination first, a shipper doesn't have to comply with all those government demands and related expenses.

Buckeye boasts a track record of growing earnings and distributions. The distribution coverage ratio remains above 1.0, a healthy sign. Its debt has declined over the past year. The Panama Canal expansion offers a market for both Buckeye's oil and natural gas businesses. Low natural gas prices have weighed on past earnings. With easier access to Asian markets, higher natural gas volumes may turn this segment around.

Original Post 

Active rigs: 181 (steady)

RBN Energy: the Caribbean fuel terminals. Bakken millionaires might consider a winter vacation to the Gulf to take a look at these terminals.

Several large deep-water terminals located strategically on Caribbean islands play an important role in the international fuel oil trade. These terminals can berth larger vessels than most Gulf Coast ports – making them ideal staging points for transshipment of ocean bound cargoes coming and going from Europe, Asia or Latin America. With its recent acquisition of the Hess East Coast terminal assets, Buckeye looks set to become a dominant player in the Caribbean terminal and storage market. Today we conclude a two-part survey of Caribbean fuel terminals.

The Los Angeles Times

I normally post The WSJ stories first, but this is quite a story: critics of Obama's healthcare plan are suing over a part of the law that offers tax credits through state exchanges. If they win, the program falls apart in 36 states.

If computer glitches are not enough of a problem, President Obama's healthcare law also has a legal glitch that critics say could cause it to unravel in more than half the nation.
The Affordable Care Act proposes to make health insurance affordable to millions of low-income Americans by offering them tax credits to help cover the cost. To receive the credit, the law twice says they must buy insurance "through an exchange established by the state."

But 36 states have decided against opening exchanges for now. Although the law permits the federal government to open exchanges instead, it does not say tax credits may be given to those who buy insurance through a federally run exchange.

Apparently no one noticed this when the long and complicated bill worked its way through the House and Senate. Last year, however, the Internal Revenue Service tried to remedy it by putting out a regulation that redefined "exchange" to include a "federally facilitated exchange." This is "consistent with the language, purpose and structure … of the act as a whole," the Treasury Department said.

But critics of the law have seized on the glitch. They have filed four lawsuits that urge judges to rule the Obama administration must abide by the strict wording of the law, even if doing so dismantles it in nearly two-thirds of the states. And the Obama administration has no hope of repairing the glitch by legislation as long as the Republicans control the House.

The law is the law. It will be interesting to see how Chief Justice Roberts interprets the law. Seems pretty straight-forward.

FreedomOutpost, August 24, 2013, provides a great discussion of this issue. 

The Wall Street Journal

I arrived in the Bakken last Sunday, and I have not read The Wall Street Journal until today. And I don't know how much I will actually read. I will probably skim through it.  

Top story, front page: violence reverses gains in Iraq. Elsewhere it was reported that Iraq is back up to exporting around 2 million bbls of crude oil each day, +/- 500,000 bbls. 

Second story: botched roll-out of ObamaCare.

HIV reminds me of the "cockroach" stories; you can't get rid of them. Do folks recall all the stories of how "we've" finally found the drug that will beat HIV? Well, again, not so fast: fight against HIV hits another roadblock. New research has dealt a setback to scientists' quest for a cure for HIV, finding that the virus might be harder to eliminate from the human body than previously thought.

Saudi women plan to defy driving ban.

This is interesting: BP -- that would be the oil company -- in a "makeover" -- is ramping up drilling. Three years after BP's Deepwater Horizon disaster and billions in asset sales and legal costs, the oil giant has started to ramp up drilling.

North Sea oil fields are on the brink of a comeback. 

Train Wreck

The State is reporting:

South Carolina this week could become the first state in the country to restrict the enactment of Obamacare since the U.S. Supreme Court upheld that law last year.

A proposed bill, on special order in the state Senate, would allow the state attorney general to take businesses, including health insurers, to court if he “has reasonable cause to believe” they are harming people by implementing the law. The bill already has passed the House.

If it passes, the bill could push South Carolina to the forefront of Obamacare resistance, giving the state’s Republican leaders a national stage. It also could push South Carolina into yet another costly legal battle in the federal courts that, critics say, is unnecessary and avoidable.

I assume that while this is tied up in court, ObamaCare would  have to be placed on hold. If not, folks "on the street" could still interpret it the way they wanted. Sort of like how illegal immigrants individually interpret "amnesty" in this country. 

Read more here: http://www.thestate.com/2013/06/03/2800482/obamacare-nullification-bill-on.html#storylink=cpy