Avis Buys Zipcar -- Obviously Not About The Bakken

Wow, this is quite a story: Avis busy Zipcar.

Zipcar is in Boston (as well as other major US cities). I see their cars every once in awhile. I think I read not too long ago that Zipcar has not made a profit in ten (10) years. That makes the story surprising. It will be interesting to see how this plays out.

However, Zipcar has struggled to grow its presence in smaller cities to counter the threat of a saturating market in bigger cities. It is also encountering increased competition from traditional car rental companies such as Hertz Global Holdings Inc and Enterprise.

My favorite car rental company: Enterprise. In those cities where I spend a fair amount of time, but don't have a car, Enterprise is my first choice.

Bad News For Canada's Oil Industry -- Rigzone

From Rigzone:

Within the last two weeks, the oil market delivered some bad news for oil and gas companies operating in Western Canada. The bad news can be summarized by the headline of an article on the commodity page of the Financial Times: "Canada's oil becomes cheapest in world amid glut in Alberta."

The forces that have created this situation include surging oil production, lower demand due to refinery maintenance and a chronic shortage of pipeline capacity to move growing volumes beyond the regional Canadian market. The impact of these conditions caused the price for Western Canada Select, the regional benchmark for low quality, viscous heavy oil, to fall below $45 a barrel, less than half the cost of other crude oil benchmarks. This price disparity is estimated to be costing the Canadian oil and gas industry about C$2.5 billion per month, or an annualized income loss of C$30 billion, or about 1.6% of Canada's gross domestic product.

With the price of Canada's heavy oil this low, it is selling for less than half the $111 a barrel price (December 26, 2012) consumers are paying for Brent oil, the global oil benchmark. Furthermore, Canada's oil is now selling at about $41 a barrel below the United States' benchmark West Texas Intermediate crude oil, which in turn is trading nearly $23 a barrel below Brent.

I've always said the Canadian oil sands were the "canaries in the coal mine" when discussing the viability of the Bakken. Thank goodness for rail.

New York State Should Follow North Dakota's Lead -- Rigzone

Have we seen this story before? I think I saw this elsewhere and linked the story. But it never hurts to link it again.

The lede at the link (The Malone Telegram [New York] via Rigzone, December 28, 2012):
December 28, 2012 Friday

Albany needs only to look west to the frigid plains of North Dakota for practical advice on whether to allow exploitation of the abundant natural gas in the shale that sits thousands of feet below the farm fields of New York’s Southern Tier all the way north into Oswego County.

Below the plains of North Dakota is the Bakken Shale. The energy industry has used hydraulic fracturing to extract nearly a million barrels of oil a day from the earth. The private investment in North Dakota to successfully produce this gusher of oil has resulted in dramatic increases in population driven by the plethora of high-paying jobs in the oil fields. The state reports that the average oil field worker earns $91,400 a year, double the average wage in the state. Three of the top 10 fastest-growing small cities in the United States are in North Dakota.

Yup.

Back In Boston -- Energy Links, the Bakken If Possible, Some Snarky Politics, I Suppose

I departed Long Beach Airport at 9:30 p.m. last night on JetBlue. A huge "thank you" to Conrad over at the JetBlue terminal getting me a great aisle seat on the plane. I was all settled in when a Japanese/Hispanic man asked if his mother from Japan could sit next to him/his wife. So, I moved from the best aisle seat to a middle seat across the aisle for a cross-country flight. But this good deed was rewarded; a most attractive young woman sat at the window seat. And so it goes.

Wow, JetBlue was nice. Fast flight. Fourpointfive (4.5) hours. Slept most of the way. I don't recall a nicer flight in quite some time; lots of leg room. At Boston (Logan) airport, public transportation is free into and out of the airport, so I caught the Silver Line Bus to downtown Boston (25 minutes) and then the Red Line Subway to Harvard Square (Cambridge) where I am presently (about 6:30 a.m.) having coffee and an old-fashioned doughnut. I e-mailed my daughter telling her I would arrive "home" later in the morning.

Cool, not cold, with a bit of old snow on the ground here.

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RBN Energy: Year of the snake. Top ten prognostications for 2013.

As we enter 2013, the major theme for U.S. hydrocarbon markets must be “surplus”.  Who wooda thunk it.  We had a white Christmas in Texas, up in the Northeast Tennessee Zone 6 gas at year-end was $10.79/MMbtu, but natural gas inventories are still at multi-year highs and Henry Hub gas is languishing at $3.47/MMbtu.  Those low prices have been great for gas demand, with gas duking it out with coal in the power generation market, and winning.  Crude production in the Bakken, Eagle Ford and Permian is skyrocketing, Cushing inventories are still high, and that is keeping WTI at Cushing at a $20/Bbbl discount to Brent.  Propane production is up 12% in the past year, while propane prices are down 35%.  And that looks good compared to ethane, with prices down 70% over the past 12 months to 24.5 cnts/gal at Mont Belvieu, pretty close to parity with natural gas and near a level that would encourage widespread ethane rejection.  What’s the world coming to?

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It appears Congress passed the ObamaCliff bill and the president is heading back to Hawaii. A reader writes to tell me that his luggage looks like something out of the 1950's with all the stickers. But that's about all the news I know. Saw it in the LA Times on-line; not sure if Drudge is really reporting it yet. Oh, yes, on the crawler on the television on JetBlue I see that SecTreas Tim Geithner has quit paying into some federal pension program to delay hitting the debt limit. Yes, JetBlue has a television at every seat. I didn't listen or watch -- slept most of the trip -- but saw the crawler as we were in final approach to Boston.

College football: I was in Los Angeles during the day yesterday but I missed the Stanford-Wisconsin game. I guess it was a good game, but Wisconsin did not score in the second half, I read. Not my cup of tea. And then I see the Orange Bowl was a yawner, 31-10. Does it even matter who played? Florida State (okay) and Northern Illinois (huh?). And, of course, USC, my alma mater, ... well, what can one say.

Hollywood: Speaking of flying back to Hawaii, and luggage looking like the 1950's with all the stickers, reminds me of David Lynch's opening scene in Mulholland Drive.  That, too, could have been set in the 50s. I was blown away by a newcomer's performance in that movie: Naoma Watts. Some years ago. I have followed her off and on over the years. Then, coincidentally and surprisingly, she was featured on the cover of Delta Airlines magazine in the December issue. I took Delta a few weeks ago, from Boston to San Antonio. I've been meaning to mention Naomi in a post for the past several weeks, always forgetting. And now, finally. An excellent cover photo, and a great story inside.

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 Okay, one last note before I move on to a new post. The Bakken. I see I received a comment about Chesapeake blowing it. I will reply to the comment. Hindsight is 20/20. Had CHK hit some good wells in southwestern North Dakota, the story would have been completely different. Someone had to drill those wells to see where the edge of the Bakken Pool was. It would be interesting to know if the Red River is viable there. I think the article said CHK drilled about eight wells. A lot more than eight wells were drilled prior to 1951 looking for oil in North Dakota before they finally hit at Clarence Iverson. It is what it is. I wish CHK the best. A lot of roughnecks worked very hard drilling those wells.

NASCAR! Who Wudda Guessed?

Thank goodness for The Drudge Report and the internet. Link to Breitbart.

The Senate-passed tax and spending bill has something for NASCAR:

The "fiscal cliff" deal reached by the Senate and the White House on New Year's Eve, and passed in legislative form by the Senate early New Year's Day, includes many giveaways to special interests --including an extension of a perk enjoyed by "motorsports entertainment complexes" otherwise known as the "NASCAR tax credit."

The provision, under section 168(i)(15) of the federal tax code, allows speedways to write off their costs over seven years. Typically, such expensing occurs over a much longer period of time, from 15 to 39 years. The cost of the NASCAR tax credit to taxpayers has been estimated at some $40 million--over and above any tax incentives provided by state and local authorities.

My hunch is that most senators were unaware of the giveaways, except for the ones they inserted. Like the ObamaCare bill, they read the bill after it's passed.

Hollywood gets a tax credit also. Sooner or later, the wind lobby will get their tax credit renewed, too. No wonder some House members (on both sides of the aisle) won't vote for this bill.