Tuesday, April 8, 2014

Without Question, The Best "NY Times" Headline For The Year

A reader sent me the link.

Another reader summed up the story pretty well:
Starting in 2017 not another worthless on or off shore windmill or solar panel will be installed in Germany for a hundred years....unless we decide to extend the "mandate".....
Original Post/Update

I saw the headline, and said, "say what?" Germany is going broke on renewable energy. Certainly ....

Read the headline, then read the story.

This is truly incredible.

Here's the New York Times headline: Germany moves forward on renewable energy plans.

Regular readers know that Spain went broke investing in renewable energy; Germany came close. Germany did lose its competitive edge due to investing in renewable energy and it will take years to recover. So, when I read the headline that "Germany moves forward on renewable energy plans," I about fell off my Starbucks Lazy-Boy. There had been a thousand previous stories suggesting that Merkel was going to scrap renewable energy.

The article says it all. You might have to read it three or four times to really sort this out. Talk about cognitive dissonance:
Chancellor Angela Merkel’s government approved legislation on Tuesday revamping Germany’s sweeping plan to generate more than 40 percent of its energy needs through renewable resources by 2025 by slowing the rapid expansion of solar and wind parks in an effort to hold down spiraling prices.
Already, 25 percent of German energy comes from renewable resources, but that advance has come at a cost to consumers, who have borne the brunt of the surcharges that funded the expansion.
Keeping power prices in check is a key element of the government’s revised policy ....
“Restart means no longer following the illusion that the energy transformation can be achieved by expanding renewable energy as quickly as possible, ...
... an agreement with regulators in Brussels, who had challenged the exemptions on the grounds that they violated competition laws within the European Union.
The broad coalition government of Ms. Merkel’s Christian Democrats from the right and the Social Democrats from the left intends that the revisions will reboot a renewable-energy policy adopted more than a decade ago.
Energy prices have risen each year since 2000 to among the highest in Europe, and the policy could lose its popular support if the prices continue to rise.
While Mr. Gabriel said he could not promise that energy prices would go down, he said the goal of the changes was to put the brakes on further increases by scaling back green subsidies and limiting the expansion of onshore wind and solar capacity. Only 2.5 gigawatts of wind and solar can be added each year, while offshore wind expansion will be capped at 6.5 gigawatts by 2020.
Starting in 2017, the renewables market will be subject to competitiveness, and providers will no longer enjoy the guaranteed prices that have helped to spur the expansion of wind and photovoltaic since 2000.
[And then a lot about environmentalists going nuts.] 
After months of wrangling, Brussels and Berlin agreed to a deal that will see some 400 of the previous 2,100 companies forced to relinquish their exemptions. 
“If we don’t want to lose jobs, we have to make sure that our companies remain competitive,” Mr. Gabriel said. “This is about hundreds of thousands of jobs.”
A reader sums it up pretty well:
Starting in 2017 not another worthless on or off shore windmill or solar panel will be installed in Germany for a hundred years....unless we decide to extend the "mandate".....

Utica Best Shale Play In The US? Pu-leeaese....They Just Banned Fracking In Ohio

Updates

April 11, 2014: since the original post, CNBC has a headline that Ohio has just banned fracking. That's not entirely correct, but it's not far off the mark. Google the story. I will post it when the spirit moves me.

 
Original Post

Nice "PR" article but I don't agree that the Utica is the best shale play in the nation. Had "they" only been talking natural gas, I wouldn't have said a thing, but once they mentioned the Bakken, I had to disagree.

In addition, the cost of Bakken wells has come down from the "30-second sound-bite $10-million Bakken well."

HoustonBizJournal is reporting that Magnum Hunter is very happy with its involvement in the Utica.
The average cost to develop a well in the Utica play is between $8 million and $10 million, compared with $4 million to $6 million for the Niobrara formation in Wyoming and Colorado, $9 million for the Eagle Ford in Texas and $10 million for the oil-rich Bakken formation of North Dakota.
I guess the "$10-million-Bakken well" and "30% of all Bakken gas is flared" are with us forever.

More On That Earlier Story About Re-Exporting Canadian Oil

Remember the original post?

Here's a bit more from The Financial Times:
Pipeline operator Enbridge said it plans to export Canadian crude oil via a US port in a move fraught with significance for energy policy in Washington.
The Toronto-listed company said it had been granted a licence to export crude produced in Canada through a subsidiary, Tidal Energy Marketing (US), confirming weeks of speculation in oil market circles. 
Canadian crude imports into the US hit a new record of 2.85m barrels per day in January. While US refineries are the main customers for this oil, Canadian producers want the option to sell these barrels onwards to other countries. 
The prospect of seeing some Canadian barrels disappear to foreign destinations will be controversial as the White House reviews the proposed Keystone XL pipeline, which would link Canada’s oil sands to refineries on the US Gulf of Mexico coast.
TransCanada, the project’s sponsor, has said Canadian oil shipped on the line will be processed inside the US. 

US law prohibits exports of domestically produced crude oil to all destinations but Canada. It allows the “re-export” of foreign-produced crude such as Canada’s as long as the oil has not been mixed with oil of US origin.
Bureau of Industry and Security data show traders in recent months have obtained licences to re-export crude assumed to be Canadian to destinations in Asia, Europe and Latin America. Enbridge is the first to publicly acknowledge plans to actually use its licence for re-export.
“We obtained the licence because one of our key strategies is to provide logistics solutions to an evolving North American crude oil supply environment that allows our customers to buy or sell where the prices are most favourable,” Enbridge said.
The company described as “small” the volumes to be exported – less than 1.5 per cent of Enbridge’s total US shipments of 2.4m b/d. Reuters first reported on Enbridge’s licence.

Active Rigs, Permits To Date, Projected Permits -- The Williston Basin, North Dakota, USA; North Dakota Close To Setting New Records In Oil -- Canola Oil; Same With Soybeans -- April 8, 2014

Three data points to think about.

Active rigs:


4/8/201404/08/201304/08/201204/08/201104/08/2010
Active Rigs191185208173103


Permits issued to date (and corresponding date) in each of the three past years (oil and gas only):
  • 2014: 749
  • 2013: 664
  • 2012: 553
Projected number of permits for the calendar year at this point in time (oil and gas only):
  • 2014: 2,790
  • 2013: 2,473
  • 2012: 2,060
2012 was the last year of the Bakken boom, "they" say.

**************************************
North Dakota Agriculture: Soybean and Canola Acres Nearing New Records


It's feels like spring and farmers are getting ready to head to the field and break some records. 
Soybean acres are estimated to be at an all time high at 5.6 million acres...which would put North Dakota in the top 5 producing states in the nation, stealing Indiana's number 4 position. 
Canola acres are also expected to be near an all time record high in the state. Farmers are expected to dedicate 1.27 million acres to the crop.
**************************************
Meanwhile, Over At Apple

MacRumors is reporting:
Apple's iPhone continues to grow in popularity with U.S. teenagers, according to Piper Jaffray analyst Gene Munster's latest semiannual teen survey, which asked 7,500 teens about their device preferences. 61 percent of teens now own an iPhone, compared to 55 percent from a survey conducted in October 2013 and 40 percent in the fall of 2012.

67 percent of teens expect their next phone to be an iPhone, up slightly from October's survey. When it comes to tablets, 60 percent of teens own one, up from 56 percent in the fall. 66 percent of those own an iPad (55% full-sized, 11% mini), which is down slightly from 68 percent, with ownership shifting further towards the mini. 18 percent of teens who don't own a tablet expect to buy one in the next sixth months and of those prospective buyers, 66 percent plan to choose an iPad. 
**************************************
Any Investor News In The Bakken? Elsewhere?

KOG was up almost 5% today. Pay attention to John Paulson's small cap picks. The story lists five; here are two:
Third on the list is Oasis Petroleum Inc., with Paulson's 7.4 million shares worth approximately $348 million. He increased his stake in the $4.4 billion market cap independent oil and natural gas E&P (exploration and production) company more than seven-fold during the fourth quarter. Other shareholders include Vince Maddi and Shawn Brennan of SIR Capital Management, Paul Jasinkiewicz of Jasinkiewicz Capital Management and Anthony Giammalva of Sound Energy Partners.
Paulson's fifth largest small cap holding is Kodiak Oil and Gas Corp., in which he owns 26.0 million shares worth approximately $291 million. He is the largest shareholder of the $3.4 billion market cap company, which is engaged in the acquisition, exploration, exploitation, development and production of crude oil and natural gas in the Rocky Mountain region. Other hedge fund managers that own the stock include Ken Griffin of Citadel Investment Group, Israel Englander of Millennium Management and Phill Gross and Robert Atchinson of Adage Capital Management.
CLR was up almost 5% today. Contributor over at SeekingAlpha: nothing regular readers didn't already know.

WLL was up about 3% today. Some insider selling at WLL. Insignificant. Must have been a slow news day. Probably needed to raise some cash to pay personal federal taxes. 

CHK was pretty flat today. Not much value in CHK spinoff -- Motley Fool:
A few weeks back, the company submitted documents to spin off the oilfield services division in order to reduce corporate debt by $1 billion and allow the independent firm to better attract non-Chesapeake clients. The division primarily operates a land-based drilling fleet and hydraulic fracturing fleets that might compare favorably to combination of Helmerich & Payne and C&J Energy Services. While those two companies are trading at 52-week highs, one shouldn't expect similar peak pricing for the spinoff.
Disclaimer: this is not an investment site. Do not make any investment decisions based on anything you may have read here or think you may have read here. 

Fourteen (14) New Permits -- The Williston Basin, North Dakota, USA; Yahoo Mail Service Disruptions Today

My "Yahoo Mail Service" has been down pretty much all day. I reply to almost all e-mail; if you sent me something and I did not reply, I probably did not receive the e-mail. It appears the e-mail is all coming in, but it may be hours (even a day) late.  This site suggests Yahoo has been having some problems today.

Active rigs:


4/8/201404/08/201304/08/201204/08/201104/08/2010
Active Rigs191185208173103

Fourteen (14) new permits --
  • Operators: Hess (8), WPX (4), Newfield (2),
  • Fields: Truax (Williams), Manitou (Mountrail), Antelope (McKenzie), South Tobacco Garden (McKenzie)
  • Comments:
Wells coming off the confidential list (mostly to DRL status) were posted earlier; see sidebar at the right.

One Mountain Divide well was canceled:
  • 27048, PNC, Mountain Divide, Ardell 36-25 1H, Divide County
One producing well was completed:
  • 25927, 1,261, Petro-Hunt, Dolezal 145-97-17A-20-2H, Little Knife, t3/14; cum --
Wells coming off the confidential list Wednesday:
  • 20910, 447, Sinclair, Nelson 2-25H, Parshall, t12/13; cum 5K 2/14;
  • 24763, 1,286, Enerplus, Catfish 148-93-15D-16H, South Fork, t10/13; cum 78K 2/14;
  • 24764, 979, Enerplus, Pumpkin 148-93-14C-13H TF, South Fork, t10/13; cum 60K 2/14;
  • 24765, conf, Enerplus, Tobacco 148-93-14C-13H, South Fork, producing, a nice well,
  • 26015, drl, MRO, Rebecca 31-26, Killdeer, no production data,
  • 26229, 470, SM Energy, Peter 4-2H, West Ambrose, t1/14; cum 12K 2/14;
  • 26404, drl, CLR, Annapolis 3-29H, Dollar Joe, no production data,
  • 26425, 325, Whiting, Lowman 44-15, Camel Hump, a Red River well, t12/13; cum 12K 2/14;
  • 26455, drl, XTO, Broderson 31X-27C, Siverston, producing,