Thursday Notes And Comments -- September 1, 2016

It appears the entire NDIC website is down. Posted at 4:33 p.m. Central Time. 

Remains down, 7:59 p.m. Central Time.  

One can watch the "hurricane winds" at this site. It looks like the hurricane is coming ashore tonight. Category 1: 75 mph.

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Two Amazon stories I might come back to later:

• Walmart looking to cut 7,000 high-paying jobs -- Fortune
• Will Amazon kill FedEx? -- Bloomberg Businessweek

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No Transmission Lines, No Pipelines -- Iowa

Court says "no" to wind farm transmission line -- ChicagoBusiness. Data points:

• high-voltage transmission line
• Texas-based utility, Rock Island Clean Line
• $1.8 billion project
• Iowa wind farms to Illinois
• 500-mile transmission line 
• would have moved 4,000 MW, enough to power 1.4 million homes
• suit brought by landowners
• three-judge panel unanimous: "the developer did not qualify as a "utility" under state law, and the developer had not met the test that the public would  have beneficial use of the project (like lower CO2 emissions, I guess)
• project had been in the work for years
• would have "moved" electricity from the Dakotas, Minnesota, Kansas, and Iowa
• also, a win for ComEd/Exelon who sees subsidized wind energy as a threat to nuclear energy in Illinois

And, no, it's unlikely the Supreme Court will take the case, regardless of what the developer says.

Meanwhile, the anti-Dakota Access Pipeline movement continues to gain momentum in both North Dakota and Iowa.

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Amazon: e-Walmart With FedEx Attached 

See link above.

Starting in September 2015, people in [Wilmington, Ohio] noticed more planes flying in and out of the airport, loading and unloading those black-wrapped boxes. This March, Amazon announced that it was leasing 20 Boeing 767s from Air Transport Services Group, a cargo company that operates out of the air park. Amazon had also negotiated an option to buy nearly 20 percent of the company. “We’re excited to supplement our existing delivery network with a great new provider, ATSG, by adding 20 planes to ensure air cargo capacity to support one- and two-day delivery,” Dave Clark, Amazon’s senior vice president for worldwide operations, said in a statement at the time. Amazon denies wrapping its boxes in black during the trial period.

Two months after the Ohio announcement, Amazon leased 20 more jets from Atlas Air, an air cargo company based in Purchase, N.Y. Amazon has also purchased 4,000 truck trailers. Meanwhile, a company subsidiary in China has obtained a freight-forwarding license that analysts say enables it to sell space on container ships traveling between Asia and the U.S. and Europe. In short, Amazon is becoming a kind of e-commerce Walmart with a FedEx attached.

With any other company, an expansion like this would be preposterous. But Amazon’s growth has been preposterous. In 2010 its annual revenue was $34 billion; last year, $107 billion. In 2010 the company employed 33,700 workers. By this June, it had 268,900. To have enough office space for its swelling headquarters staff, Amazon has swallowed Seattle’s South Lake Union neighborhood, and it’s building three tree-filled biospheres in the city that will allow workers to take contemplative breaks, like so many Ralph Waldo Emersons in Jetsonian luxury. The company is the fifth-most valuable in the world: Its market capitalization is about $366 billion, which is roughly equal to the combined worth of Walmart, FedEx, and Boeing.

Amazon’s ambitions depend on the continued success of its Prime service. For $99 a year, Amazon Prime customers get two-day delivery at no extra charge. Those who sign up tend to spend almost three times as much as their non-Prime peers. The company zealously guards its numbers, but Consumer Intelligence Research Partners estimates that Amazon had 63 million Prime members as of late June—19 million more than the year before.

Amazon keeps subscribers in the fold by lavishing them with perks such as free access to Amazon Video, the Kindle Owners’ Lending Library, and trial subscriptions to the Washington Post, which Bezos, a billionaire many times over, purchased for $250 million in cash three years ago.

But more than anything, Prime members sign up for that fast shipping, which keeps getting faster. In many large cities, subscribers can now get free two-hour delivery on more than 25,000 items they might otherwise have bought at Walgreens or 7-Eleven. For an additional $7.99, orders arrive within an hour.

Some company executives joked that the service should be called Amazon Magic; they went with Prime Now.

I accidentally subscribed to Amazon Prime and love it. In the old days, I would wait until "my cart" reached the number of items necessary for free shipping, buying "stuff" at Walmart if it couldn't wait. With Prime Amazon, it's just like buying at Walmart -- except cheaper and delivered to the door in two days, sometimes in one.

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Walmart Cutting High-Paying Jobs

See link above.

Walmart will cut some 7,000 accounting and invoicing positions within its U.S. stores as the discount retailer redeploys workers to improve in-store customer service.

The largest U.S. retailer, also the country’s largest private employer, plans to eliminate those jobs over the next several months. Those jobs are typically occupied by long-term and often higher-paid store employee. [Long term -- think higher paid due to annual salary increases; and, higher cost of health benefits; and pension payments about to begin.]

The benefit for Walmart is that it could then put more workers on the floor helping customers, something infinitely more valuable to the retailer as it looks to give people a reason to shop at its stores rather than on Amazon.com. A company spokesperson confirmed that Walmart expects the affected employees are likely to find customer-facing roles at the Walmart store. [This is less likely to have an effect on Amazon, and a greater effect on Target.]

The move follows a test earlier this summer at 500 stores, mostly west of Colorado, to eliminate three administrative jobs related to accounting and invoicing at each store and see if those functions could be replaced by workers in the home office and by machines. The jobs being eliminated involve counting cash or managing invoices for suppliers. Invoicing will be handled by a central office at company headquarters in Arkansas, while money will be counted at each store by a “cash recycler” machine.

When "Free" Isn't Free -- August 18, 2015; Update On Bakken Economy -- Rural Electricity, Mandan Low-Income Housing

This might be the biggest intermittent energy news story I will see all week. I followed this Northwood, Iowa, school district wind turbine story from the beginning, thinking how foolish it was when I first saw it many, many years ago.

This is really quite amazing. This school district is considering selling its wind turbine after 13 years because it is generating less profit than they thought it would. I honestly don't get it. One would think that after 13 years, the turbine would have been paid for (perhaps twice) and all that free wind energy would have meant no electric bills.

And I certainly didn't think school districts were into making profits on wind. One would think that school districts would simply want to pay the least possible for electricity. I would assume that ditching "free wind" now and starting to pay for conventional electricity would be more expensive, so there must be more to the story. And there is. Paragraph four in the AP story below:

The Northwood-Kensett school district is considering selling its wind turbine that officials say has generated smaller profits than initially projected.

The school district bought the 250-kilowatt turbine about 13 years ago for an estimated $68,000, the Mason City Globe Gazette reported. Officials had planned for the equipment to be moved to the Northwood-Kensett school campus in Northwood, but it never happened.

The turbine remains at a wind farm, where it generates electricity that the district sells to Alliant Energy.

Superintendent Mike Crozier said the turbine has produced about $4,050 in total profits for the district over the past five years. Officials estimate that the equipment should generate between $12,000 and $14,000 annually, but has earned far less due to mechanical breakdowns.

Crozier said that if there's a "market out there, we'll go ahead and sell it."

One wonders how many years they've been operating in the red, when all costs are taken into account. It's interesting that they don't provide a better figure on how much income is actually being generated. Again, if there was even a $100/year profit, why would they get rid of it?

Probably because the intermittent hassle is becoming less intermittent and more continuous.

Maybe they plan to buy a new wind turbine.

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Bakken Economy

KXNET is reporting that Minot-based Central Power Electric Cooperative is getting a $46 million federal loan for infrastructure improvements.

The money is through the U.S. Department of Agriculture's Rural Utilities Service. The Minot-based co-op will use it to build 51 miles of transmission line and make improvements to its distribution system.

This comes on top of a loan guarantee of more than $29 million the co-op received last year.

KNXET is also reporting that the Mandan (ND) Junior High building will be converted to low-income housing, a project spearheaded by the Spirit of Life Catholic Church.

"The list for low-income housing is so long that they've stopped adding names to the list because they're just so far behind being able to meet the need," says Gion.

Mother Teresa Outreach, an organization formed through the church, is the new owner of this building.

Their plan is to convert it into 62 low-income family apartments.

It will be called Sagrada Familia Apartments or in English - Holy Family Apartments.
"From my understanding, it is needed in Bismarck and Mandan and Spirit of Life is doing a wonderful job. I can feel so many people come for food and shelterless and they are below poverty line. They need our help," Sister Mary Michael, Congregation of Teresian Carmelites.

Gion says this will be more permanent housing, with no cap on how long families stay.
"The goal is stability, a place that's safe and where families can be at peace and so I would hope that that would be a part of what the whole neighborhood experiences," says Gion.

Wednesday, August 12, 2015; BR's Upper, Middle, And Lower Three Forks; Iowa Quickly Becoming The Wind Farm For America

Active rigs:

	8/12/2015	08/12/2014	08/12/2013	08/12/2012	08/12/2011
Active Rigs	72	194	184	199	191

RBN Energy: update on the Henry Hub, a continuing series.

For newbies, a new designation regarding the Three Forks benches, from an update elsewhere --

#29434, SI/NC, BR, Kings Canyon 3-1-27MTFH is an important well from standpoint of understanding "legal" names of BR Kings Canyon wells in Camel Butte. In the original post below, written a long time ago, I suggested that the "M" in MTF stood for "middle Three Forks," a new term for me. In the old days, it was simply the upper Three Forks that was targeted whenever we saw "TF" in the legal name. Shortly thereafter, operators starting talking about the four benches in the Three Forks, and the "upper TF" became TF1, the first bench. Now, we see "middle Three Forks. In the application, this is identified as Three Forks B2 (second bench).  

BR seems to suggest they might refer to these benches as the upper Three Forks (first bench, B1, UTH); the middle Three Forks (second bench, B2, MTH); and the lower Three Forks (third bench, B3, LTH), suggesting they will not be targeting the fourth bench.

I think this was the first advertisement-free site to suggest what BR meant by UTFH, and that was done quite awhile ago. Always something to learn in the Bakken.

By the way, for newbies, the upper Bakken and the lower Bakken are shale, and are generally not targeted (Slawson has targeted the upper Bakken in tests). The Bakken is a "tight" play and not a "shale" play, I think, is what purists say. The terms "tight" and "shale" are often used interchangeable, but purists "know" the difference.

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Iowa Wind Energy 

For The Archives

Don sent me this link. It's a great article in that is provides a lot of data points for the archives. Update regarding Iowa wind energy:

I think most of this wind energy is being sent out-of-state; it's being used by utilities to meet out-of-state-mandated numbers, I believe.

The good news:

• Iowa has found a revenue-generating business model
• the wind farms are in Iowa and not in western North Dakota; I don't think Teddy Roosevelt would mind; there's probably a reason there are only two national parks in Iowa (although I can't find them at this site, maybe others can);
• and, yes, natural gas will be needed to back-up all this intermittent energy

Great article. Lots of data points. 

Note this: 

On the consumption side of the equation, as of 2015, the Obama Administration does not even breakout wind energy for Iowa (for 2013, the most recent year data is available).  It appears that for electricity, Iowa consumes, in BTUs, from the following sources:

• coal: 400
• natural gas: 305
• nuclear: 50
• other renewables (which I assume is mostly wind): 150

150/750 is still very, very impressive. But, again, all that intermittent energy needs to be backed up by natural gas -- unless they build 4x as many wind farms as needed across the entire state, and assume that if 25% are turning 100% of the time, they will not need back-up.

Iowa is going to look like one huge industrial wind farm. That never goes away. Because, after all, wind is "renewable." 

Iowa becomes the wind farm to America.