"California's EV Dream Is Turning Into A Nightmare" -- Oilprice -- October 23, 2019

Is there a new sheriff in town? I never expected to see this headline over at oilprice.com: "California's electric vehicle dream is turning into a nightmare." Link here.

California might be blazing a trail with getting a large number of electric vehicles on the road, but the only trail California is currently blazing is the wildfire/PG&E fiasco that could once again plunge millions of Californians into the dark in the next wave of blackouts, expected today, the likes of which could sour investor confidence in purchasing a vehicle that relies on sketchy power sources.

 It’s windy in dry California, and apparently that’s enough to trigger another preemptive blackout for PG&E customers. For starters, PG&E will cut power to 179,000 residents on Wednesday.

But it’s not just PG&E. Other utilities, too, such as Edison International and Sempra, are also expected to cut off power to hundreds of thousands of Californians who are in an area that is notoriously dry, with winds expected to combine with those dry conditions to create too much of a fire risk.

Meanwhile, Governor Newsom has asked for an investigation into the high price of gasoline in his state of California.  As lieutenant governor, Newsom supported higher gasoline taxes and the public went along with him, voting to raise taxes on gasoline.

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Water, Coal, and Fracking

Golf courses are not mentioned. We've discussed this before.

We've Been Through This Before -- The Bakken Has Plenty Of Water. The Permian? No Problem -- Rigzone -- January 22, 2019

From Rigzone: frack water demand in the US skyrockets.

While U.S. shale oil production is hitting record levels, Rystad has found that frac water demand has more than doubled since 2016. The demand in the Permian alone currently exceeds all of U.S. demand of 2016.

The future for frack water demand also looks positive, with Rystad predicting demand to grow by an additional 6 percent in 2019 [inconsequential]. The Permian will see demand surpass 2.5 billion barrels by 2020.

"Even with such steep growth, market concerns about sourcing challenges and bottlenecks appear to be minimal.”

Rystad noted strong growth for the water treatment market in 2018, with a 28 percent expansion to 1.4 billion barrels last year. The market is forecast to double 2016 totals by 2020.

Note: the amount of water used in the Bakken has remained relatively stable for several years.

July 28, 2014 -- A Very, Very Quiet Monday Morning -- Except For Those Holding Family Dollar (Being Bought By Dollar Tree); Buffett Buys Canadian Utility (AltaLink); Pending Home Sales Post First Drop In Four Months

Active rigs:

	7/28/2014	07/28/2012	07/28/2011	07/28/2010	07/28/2009
Active Rigs	193	207	181	139	40

RBN Energy:

In 2013, refineries in Eastern Canada imported 642 Mb/d of light crude. Today there are no pipelines connecting western Canadian crude supplies to the East Coast. By the end of 2014 the Enbridge Line 9 pipeline will link Canadian supplies from Alberta and Bakken supplies from North Dakota to refineries in Montreal. By 2018 the Energy East pipeline could be flowing 1.1 MMb/d to Canada’s Atlantic Coast and beyond.

Today we begin a new series on eastern Canadian transport options by reviewing existing crude supply.

There are 9 refineries in Eastern Canada with combined capacity of about 1.3 MMb/d.

Although Canada produces far more crude than it consumes, much of this output is heavy crude from Western Canada.  

Eastern refineries are not configured to process this type of crude but instead mostly consume light crude supplied from a mixture of offshore Atlantic seaboard production, imports from international suppliers and increasingly – imports of light crude from the US. Offshore eastern Canadian production averaged 240 Mb/d in 2013 and East Coast refiners processed about 47 percent of that - mostly light sweet crude. Eastern refiners have also traditionally processed imports from the Atlantic basin – particularly light crudes from West Africa.  

But imports of US crude into Canada – primarily used to supply Eastern Canadian refineries reached a record 268 Mb/d in April 2014, double the level a year earlier, according to the Energy Information Administration (EIA). As we described last December, eastern Canadian refiners have been importing US crude even as exports of local offshore production have increased.

The blog discusses the Canadian refineries (three "buckets") and what the Enbridge 9A reversal means.

The Wall Street Journal

US push for Gaza truce yields little. Hamas starting firing rockets as soon as the truce ended.

The Los Angeles Times

How much water do golf courses use? This is an interesting bit of trivia.

Then there is San Juan Capistrano, which the state said had a 37% increase in water use. City officials, however, note that May was an outlier. A new golf course opened in the city, and there was an unusual amount of construction.

Los Angeles Metro (subway; light rail) uses "honor system" for riders; wondering why they are losing money. Last year: 115 million riders; 70 million paid.

Reducing fare jumping as much as possible has become increasingly important to Metro, which is under pressure to boost ticket revenue as its rail network rapidly expands.

Income from fares covers just 26% of Metro’s bus and rail system operating expenses, one of the lowest rates of any major world city. That ratio must increase in the next few years or the agency risks losing crucial federal funding needed to continue building and operating the train network.

“This isn’t Chicago or New York, where you can’t get through unless you pay,” Fields said.

I can't make this stuff up.

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Non-Bakken Stuff; For Investors Only

AAPL flirting with $100 ($700 pre-split). 

WTI crude oil at $101 -- trending toward $100. Again.

Pending home sales: first decline in four (4) months. Analysts had expected an increase:

The pending home sales index slipped 1.1% from an index reading of 103.8 in May to the June reading of 102.7. That is 7.3% lower than in June 2013, when the index reading was 110.8. The consensus estimate called for a month-over-month increase of 0.3% in pending sales. The index reflects signed contracts, not sales closings. An index reading of 100 equals the average level of contract signings during 2001.

About 30 companies -- much longer list than usual -- announce increased dividends.

Warren buys Alberta (Canada) utility:

The federal government [Candad] has signed off on the controversial $3.2-billion sale of Alberta’s largest electricity transmission provider to a company owned by U.S. billionaire Warren Buffett.

The approval, however, comes with a long list of conditions, including the guarantee that buyer Berkshire Hathaway Energy must reinvest every penny it earns from AltaLink in the company, the province or Canada, if it is allowed to complete the purchase from Quebec-based SNC Lavalin.

AltaLink president Scott Thon said the approval should reassure Albertans who fear the image of a big American company milking the province’s infrastructure for its enrichment.

Samson Oil & Gas provides Q2 update: Co files its Q2 quarterly report.

• 72% increase in oil production in the June 2014 quarter over the March 2014 quarter
• 75% increase in estimated oil revenue in the June 2014 quarter over the March 2014 quarter.

Investors dumped this stock (data from Yahoo!Finance which might lag a quarter)

• market cap: $148 billion
• enterprise value: $145 billion
• annual revenue: $82 billion
• total cash: $8 billion
• total debt: $3 billion
• operating cash flow: $5 billion
• forward P/E: 149; trailing P/E: 500

Darling of Wall Street (data from Yahoo!Finance which might lag a quarter)

• market cap: $4.2 billion
• enterprise value: $6.5 billion
• annual revenue: $1 billion
• total cash: $15 million
• total debt: $2.3 billion (almost as much as the company above with a market cap of $148 billion)
• operating cash flow: $600 million
• forward P/E: 15; trailing P/E: 28

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The 20:15 Train Wreck

The AP is reporting, two data points from this article on ObamaCare:

• Automatic enrollment for ObamaCare enrollees for 2015I could be a new twist on an old public relations headache for the White House: You keep the health plan you like but get billed way more.
• Even with such generous subsidies [see below -- monthly premiums as low as $82 are too onerous for many], about 4 in 10 who bought a health law plan say they have trouble paying their premiums, according to a poll by the nonpartisan Kaiser Family Foundation.

But much more serious:

In the 36 states served by the federal insurance exchange, the tax credits average $264 a month, reducing the average monthly premium of $346 to just $82.

The most recent court ruling says that subsidies paid by the "federal insurance exchange" (in 36 states, by the way), is unlawful. [Update: A three-judge panel for the U.S. Court of Appeals in Washington ruled Tuesday that subsidies may not be offered in the federal health exchange. That was the ruling I was referring to. It turns out that "hours later the Fourth Circuit Court of Appeals offered its own decision, which upholds the Obama administration's arguments that subsidies can be applied in the federal exchange." I assume this will head to the Supreme Court; regardless, it puts the few million that are actually enrolled into more turmoil. A huge "thank you" to a reader for alerting me to the "most recent" ruling. That explains the "split ruling" that hit the news about the same time. For now, the subsidies remain in effect.]

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Ignorance Is Bliss

Easy Come, Easy Go

Almost Half Of ObamaCare Enrollees Receiving Subsidies Don't Even Know They Are Receiving Subsidies -- Think How Much They Would Like The President If They Only Knew

I make so few errors when blogging that when I do make an error it bothers me for days. I will be upset for a month on how I wrote the ObamaCare update above before a reader caught an error. But I'm in very good company it seems. I can't make this up.

I just now received this next link from another reader. CNBC is reporting:

Nearly 40 percent of Obamacare enrollees who receive federal financial assistance to help pay for insurance sold through HealthCare.gov don't even know they're getting any such aid, a survey stunningly found. [Really, stunningly?] (UC-Irvine -- really?]

That finding means that about 2.1 million people—at the very least—are unaware that they stand to lose thousands of dollars worth of aid that makes their health insurance affordable if the Supreme Court upholds a new court decision that said such subsidies are illegal under the Affordable Care Act. [I think that's almost exactly what I wrote. Memo to self: send a note to CNBC: hey, look at the Fourth Circuit Court of Appeals ruling.]

Ignorance is bliss.

Easy come, easy go, if the subsidies are lost.

I can't make this stuff up.

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A Note for the Granddaughters

Virginia Woolf remains my favorite author, or perhaps better said, the author that is most important for me.

I have transcribed -- completely, word for word -- two of her novels: Mrs Dalloway and The Waves. In transcribing Mrs Dalloway I discovered on my own that it was a "prose poem," something I did not know existed until then, and then discovered I had "re-invented the wheel," as they say. Having said that, it was one of the best "literature" things I have ever done, transcribing Mrs Dalloway in free verse.

I transcribed The Waves for a number of reasons. It is perhaps the most difficult to follow, and yet it is considered by many to be her best novel. In addition, closer to home, a close family friend, Ellen, considers it her favorite novel.

Mostly because I could not understand it, I transcribed The Waves.

Today I added the following to that transcription:

Perhaps somewhere else I tried to correlate the Greek party-goers and the characters in The Waves with Virginia Woolf’s circle, but if I did not, a couple of thoughts:

Jinny: serial lover of men, can only be Nessa, (Vanessa, Virginia’s sister; who had at least three lovers)

Percival: can only be Thoby; a he-man who died falling off a horse; Virginia worshipped her brother Thoby

Neville: homosexual; could only be Clive Bell, Nessa’s husband

Susan: possibly Virginia – Jinny’s life partner through extension of Greek counterparts

Socrates: could Virginia’s husband Leonard Woolf be Socrates?

Bernard is the storyteller in The Waves which is most likely Lytton Strachey. From wiki: he is best known for establishing a new form of biography in which psychological insight and sympathy are combined with irreverence and wit. His biography Queen Victoria (1921) was awarded the James Tait Black Memorial Prize. He was perhaps best known for his Eminent Victorians.

Rhoda is the youngest; I can’t think of a third woman in Virginia Woolf's circle; it was just Virginia and Vanessa, and many men: Leslie, Thoby, Adrian, Clive, Duncan Grant, Lytton Strachey. Roger Fry was also one of Vanessa’s lovers – she had at least three lovers: Clive, whom she married; Duncan Grant, whom she probably loved most, if I remember correctly; and, Roger Fry. There were several women in the group, but less well-known: Dora Carrington, Angelica Garnett, Julia Strachey, Molly (Mary) MacCarthy, Lydia Lopokova. Based on the linked essay below, Mary MacCarthy. 

A superb essay, by the way on The Waves and the Bloomsbury Group: Utopian Wholes: Virginia Woolf's The Waves and the Bloomsbury Group. 

Oil Industry Provides Water To Drought-Stricken Central Valley In Southern California -- New Yok Times

This is a pretty interesting story sent in be a reader, thank you. The New York Times is reporting:

BAKERSFIELD, Calif. — The 115-year-old Kern River oil field unfolds into the horizon, thousands of bobbing pumpjacks seemingly occupying every corner of a desert landscape here in California’s Central Valley.

A contributor to the state’s original oil boom, it is still going strong as the nation’s fifth-largest oil field, yielding 70,000 barrels a day.

But the Kern River field also produces 10 times more of something that, at least during California’s continuing drought, has become more valuable to many locals and has experienced the kind of price spike more familiar to oil: water.

The field’s owner, Chevron, sells millions of gallons every day to a local water district that distributes it to farmers growing almonds, pistachios, citrus fruits and other crops.

It is one of the more unusual sources of water, one whose importance has increased in a year when the drought has forced farmers to fallow fields and bulldoze almond orchards.

The water is pumped out of the same underground rock that contains oil; after the two are separated, the water flows through an eight-mile pipeline to Bakersfield’s Cawelo Water District, which this year will rely on Chevron’s water for half of its supply, up from an average of a quarter. The district sells it exclusively to farmers for irrigation and reduces its salinity by blending it with water from other sources.

This was a most interesting data point:

According to the Western States Petroleum Association, 323 acre-feet of water were used in fracking 830 wells in California in 2013, compared with 2.7 million acre-feet for agriculture here in Kern County, the heart of California’s oil industry.  

Rounding:

• in 2013, the oil industry used 300 acre-feet of water for fracking in ALL of California
• in 2013, in Kern County alone -- one county -- agriculture used 3 million acre-feet of water

So, for Kern County, agriculture alone: 3,000,000 acre-feet of water; add in all of California's oil industry fracking water and one gets 3,000,300 acre-feet of water.

Two very important statistics were not noted in The New York Times article: irrigating golf courses, and marijuana farms.

Quick: how much water does the average golf course in California use per year: 350 acre-feet.

So, ALL fracking in ALL of California used less water than the AVERAGE amount of water to irrigate ONE golf course in California.

ALL fracking in ALL of California used less water than the amount of water required to irrigate ONE AVERAGE golf course in California.

Of course, that begs the next question. How many golf courses ARE there in California? Drum roll ... drum roll ... 1, 126.

So, rounding 1,000 x 350 = 350,000 acre-feet to irrigate all the golf courses in California. Add the water used in fracking and we get 350,300 acre-feet. Okay. 

Water used by the oil industry for fracking is NOT an issue.

In both cases, adding ALL California fracking water is a rounding error when added to water used in Kern County alone for agriculture or when added to water used for all the golf courses in California.

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Marijuana Uses A Lot Of Water Per Plant, But Not That Much State-Wide 

The places one will go when one starts surfing the net!

So, back to marijuana farms. Daily Record News is reporting:

On a 21,000-square-foot field for marijuana, Hoffman’s estimate, like Graham’s, comes out to about 840,000 gallons of water annually.

That's about 2.5 acre-feet.

21,000 square feet is about one-half acre. House size? FactCheck.org is reporting:

In addition, at about 10,000 square feet, Al Gore’s home is a little less than four times the size of the average new American home built in 2006. In contrast, the Crawford ranch belonging to Bush was about 4,000 square feet.

So, a marijuana farm, about half the size of Algore's McMansion, will use 2.5 acre-feet of water annually (and annually is important; once a well is fracked, it is rarely fracked again; a fracked well is a one-time event for all practical purposes. Marijuana farms and golf courses will use water year in / year out.

For the record: my one-room apartment in the Dallas-Ft Worth area is 651-square feet, though I would like to move into a one-room apartment with 901 square feet.  

Warning: I often make simple arithmetic errors. 

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Global Warming: Fortunately Chinese CO2 Is Not Our CO2

Zacks over at Yahoo!Finance is reporting:

Ford Motor Co. has posted record sales of 549,256 vehicles in China in the first half of 2014. This translates into a 35% surge from 407,474 vehicles sold in the first half of 2013. The automaker’s passenger car joint venture – Changan Ford Automobile  – also witnessed a 39% increase in wholesale vehicle sales in the first half of 2014 to 397,958 units as against 286,433 units sold in the same period a year ago.

My hunch is that, by executive order, Governor Jerry Brown, in a joint-pen-signing ceremony with President Obama, will sign a non-binding proclamation to build a CO2 barrier along the US Pacific Coast to divert the westerly Chinese CO2 to the north (Canada) and to the south (Mexico).

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"Recycled"

Granddaughter's Sculpture

Other than the tuna can for the "Weber grill," everything else should be self-evident.

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Tongue-In Cheek

I wrote the note below based on one data point: the headline; nothing more, nothing less. It will be interesting to see how closely the tongue-in-cheek note below matches reality.

Reality: 

• none of the $3.7 billion will be used for deportation; I wasn't the only one who noticed that

 
President Obama Seeks Almost $4 Billion To Care For His Children

The Los Angeles Times is reporting:

President Obama will seek $3.7 billion in emergency funds from Congress  to meet the country's  “moral obligation” to care for unaccompanied minors who have flooded in recent months to the southwestern border, White House officials said Tuesday.

Nearly half the money would go to the Department of Health and Human Services for food, housing and medical care for the tens of thousands of children and teenagers who have arrived at the border, senior administration officials told reporters.

The rest of the money would be aimed at deterring further migrants by strengthening law enforcement, going after smuggling networks that ferry people from Central America and expanding the number of deportation hearings.

Nothing was said about actually returning the children to their home countries. The breakdown will go something like this:

DIRECT COSTS:

US Agency For Dreamers

• High Commissioner, annual salary: $250,000
• Executive director, high commissioner's spouse: $200,000
• First year's full-time equivalents: 51 @ $80,000 average each = $4,080,000

Room and Board

• Housing, military bases, and seaside resorts:  $500 million
• Food: off-budget; will come from existing USDA programs including "Food Stamps," cheese, milk subsidies

Medical

• Mobile medical care units: $500 million
• CXRs (tuberculosis surveillance): $50 x 60,000 "children" = $3 million
• Immunizations: off-budget; excess immune sera from NIH, CDC, UN
• Louse control: one-time bath provided by water parks as marketing tool
• Birth control pills and contraceptives: $75 x 30,000 "children" =  $2.25 million
• Planned Parenthood: $1 million

Centers For Dreamers, Administrative Services

• Lease for 25 centers @ $1 million/location = $25,000,000
• Social Services: 100 full-time equivalents at $50,000 per annum = $5,000,000 
• Transportation to and from living quarters to CFDAS facilities = $2,000,000

Education

• K - 12: off-budget; local school districts
• English as a second language: educators, 3,000 FTE's at $75,000 each = $225 million

Re-location Costs

• Finding parents already here in the states: off-budget; Lois Lerner/IRS has (had?) that data
• Finding parents not yet here in the states: off-budget; NSA has that data
• Notification costs: $0.46 "Forever" stamp and $3.00 handling fee x 50,000 = $173,000 (donation from Hillary Clinton Foundation)
• Taxi expense for the four children who reunite with their parents: $750 x 4 = $3,000 (tax-deductible donation from Joe Biden and his wife) 

Subtotal:  $1,267,780,000 ($1.268 billion)

INDIRECT COSTS:

US Supreme Court:

• $5 million for new recreation facility
• $5 million for new dining facility
• $5 million for new auditorium
• $5 million for new legal library study 

California:

• $500 million for bullet train initiative
• $500 million for renewable energy initative

Texas:

• $0

New York State:

• $100 million for speaking fees for Hillary, Schumer, et al, to promote the program
• $10 million to New York Times to write feature story on program 
• Wall Street Journal: $0

New Jersey:

• $100 million for continued Hurricane Sandy reimbursement to parents of Guatemalan children

Arizona:

• $0

Los Angeles:

• $50 million for documentary, "Humanity Crossing the Pan-MexicUS Desert"; Director Sean Penn; Producer Mel Gibson; starring roles for Brad Pitt, Angelina Jolie (migrants); Tommy Lee Jones (sheriff)

New Mexico:

• $50,000 for Santa Fe art colony to document humanity crossing the Pan-MexicUS-Desert

Portland, Oregon:

• $50,000 for New Age band to provide music for documentary

SUBTOTAL, Indirect Costs: $1,280,100,000  ($1.28 billion)

TOTAL, Direct and Indirect Costs: $2,547,880,000 ($2.32 billion)

Miscellaneous that Congress will write into the bill authorizing this expenditure: $1,152,120,000 ($1.15 billion) (amendments from Blue State congresswomen and senators, only). Shortfalls in the budget can be accommodated by eliminating direct health care expenses and obtaining medical care off-budget through military health care facilities and the Veterans Administration hospitals. Deaths, though expected to be few, will be in national cemeteries at expense of Social Security Administration and the military.