The Bank With No ATM, Only One Branch -- November 17, 2014; Big Health, Big Government In Mutually Beneficial Relationship -- NYT

Fun fact:  All 50 US States will experience temps below freezing tonight somewhere within state lines! -- being reported by National Weather Service out of Wilmington, North Carolina.

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Original Post

The only state-owned bank in the US is in North Dakota.

The Wall Street Journal is reporting:

It is more profitable than Goldman Sachs Group Inc., has a better credit rating than J.P. Morgan Chase & Co. and hasn’t seen profit growth drop since 2003.

Meet Bank of North Dakota, the U.S.’s lone state-owned bank, which has one branch, no automated teller machines and not a single investment banker.

The reason for its success?

As the sole repository of the state of North Dakota’s revenue, the bank has been one of the biggest beneficiaries of the boom in Bakken shale-oil production from hydraulic fracturing, or fracking.

In fact, the bank played a crucial part in kick-starting the oil frenzy in the state in 2008 amid the financial crisis. When other banks around the U.S. were curtailing lending and increasing reserves, Bank of North Dakota helped smaller banks in the state ride out the crisis by providing them with letters of credit, loan sales and bank stock.

Since then, its total assets have more than doubled, to $6.9 billion last year from $2.8 billion in 2007. By contrast, assets of the much bigger Bank of America Corp. have grown much more slowly, to $2.1 trillion from $1.7 trillion in that period.

I am absolutely convinced "the Bakken" did not JUST happen. This is just one more example.

Much more at the link.

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They Built It: A Powerful, Mutually Beneficial Relationship -- Big Health, Big Government

The New York Times is reporting, we get what we vote for:

As Americans shop in the health insurance marketplace for a second year, President Obama is depending more than ever on the insurance companies that five years ago he accused of padding profits and canceling coverage for the sick.

Those same insurers have long viewed government as an unreliable business partner that imposed taxes, fees and countless regulations and had the power to cut payment rates and cap profit margins.

But since the Affordable Care Act was enacted in 2010, the relationship between the Obama administration and insurers has evolved into a powerful, mutually beneficial partnership that has been a boon to the nation’s largest private health plans and led to a profitable surge in their Medicaid enrollment.

The insurers in turn have provided crucial support to Mr. Obama in court battles over the health care law, including a case now before the Supreme Court challenging the federal subsidies paid to insurance companies on behalf of low- and moderate-income consumers. Last fall, a unit of one of the nation’s largest insurers, UnitedHealth Group, helped the administration repair the HealthCare.gov website after it crashed in the opening days of enrollment.

Again, this story never would have appeared BEFORE the mid-term election, but now it's time to move POTUS off the center stage of this three-ring circus.

On a side note, investors are going to do very, very well.

Ten (10) New Oil & Gas Permits -- North Dakota, November 17, 2014

Results of the wells coming off the confidential list over the weekend and Monday were reported and posted earlier; see sidebar at the right.

Active rigs:

	11/17/2014	11/17/2013	11/17/2012	11/17/2011	11/17/2010
Active Rigs	185	183	187	201	159

Wells coming off the confidential list Tuesday:

• 22363, drl, QEP, Kirkland 15E-23/14H, Grail, no production data,
• 27005, drl, Statoil, Brown 30-19 5TFH, Alger, no production data,
• 27815, drl, Hess, HA-Mogen-LE-152-95-0805H-1, Hawkeye, no production data,
• 28065, drl, Hess, En-State C-156-93-1615H-8, Alger, no production data,
• 28138, 118, CLR, Jefferson 6-17H1, Crazy Man Creek, t9/14; cum 2K 9/14;

Ten (10) new permits --

• Operators: XTO (4), Oasis (3), Enerplus, MRO, Whiting
• Fields: Bear Creek (Dunn), Tyrone (Williams), Spotted Horn (McKenzie), Black Slough (Burke), Murphy Creek (Dunn), South Heart (Stark) 
• Comments:

Four (4) producing wells completed:

• 26476, 1,394, CLR, Rochester Federal 6-24H, North Tobacco Garden, t10/14; cum --
• 26864, 184, XTO, Ruby State Federal 34X-36E, Grinnell, t9/14; cum 1K 9/14;
• 27761, 317, Oasis, White 5198 12-6 2T3, Siverston, t10/14; cum 3K 9/14;
• 27977, 1,790, Oasis, White 5198 13-6 14T, Siverston, t10/14; cum 3K 9/14;

Three producing wells abandoned, including:

• 16552, 53, Hess, Nelson 14-33H, Alkali Creek, the first of a possible 5 wells to be drilled in the Cazador Project by MRO; open hole frack with about 600K sand?, t8/07; cum 21K 9/14;
• 21695, 32, Flatirons Resources, Lunde 32-33, South Pleasant, a Madison well, t3/12; cum 5K 9/14;

No Evidence Of Ground Water Contamination In The North Dakota Oil Patch -- November 17, 2014

The Bismarck Tribune is reporting:

Random testing of shallow groundwater in the Northern Plains oil patch found no evidence of contamination from an energy boom that's already seen more than 8,500 wells drilled, federal scientists said Monday.

However, the U.S. Geological Survey cautioned that the tests could have missed contamination from surface spills or leaking well casings. That's because water can take many hundreds of years to migrate beneath the surface, meaning contamination might not have reached USGS sample sites.

"This is good news, really good news," said USGS hydrologist Rod Caldwell. "But we didn't try to sample a bunch of water all around oil and gas wells. We just tried to look at the overall health of the aquifer."

"Could have missed contamination....because water can take many hundreds of years to migrate beneath the surface...."

It should be noted that they've been drilling and producing oil in North Dakota since the 1950's and no evidence -- no evidence whatsoever of any groundwater contamination. From the very beginning North Dakota required a steel pipe to a level of 2,000 feet, and cement casing completely surrounding that steel pipe. Nowhere in the drilling area in North Dakota is ground water found below 2,000 feet, to the best of my knowledge. I feel pretty comfortable saying that because Don told me. Seriously, if there was groundwater deeper than 2,000, the state would require cement casing to go lower. 

What I find interesting is that it is my understanding that oil has been sprayed on gravel roads for decades to keep the dust down in North Dakota. Oil, I assume, was also used for weed control in ditches along the road. I assume there have been many, many oil spills over the years, and many were probably never reported during the early days. We still have the occasional well blow-out spewing oil over hundreds of acres. Pipeline spills. Rail tanker derailments. The list is endless.  Of course, I assume a lot of oil went directly into water sewers by folks changing their own oil. And yet, they find no -- absolutely no -- evidence of any groundwater contamination. I assume a lot of that oil is filtered out if it has to go through 1500 feet of earth before it gets to ground water. Again, just my opinion. No background in this area.

The Ethanol Legacy; What Goes Around, Comes Around; North Dakota To Help Solve The Global Warming Problem -- November 17, 2014

I posted this earlier as part of a multi-story post. I can see that it is getting more attention than I thought it would so I've moved it here for a stand-alone post.

For background, it is important to read this over at bigpictureagriculture: 

The amount of land enrolled in the Conservation Reserve Program (CRP), at 27.1 million acres, is down by 26 percent, or 9.7 million acres in the past five years, to a 25 year low. [It puts the Chevrolet story below into perspective: GM is "buying" 6,000 acres for CRP.]

During this same time period, corn acreage has increased by 13 million acres.

Farmers are once again planting crops on marginal lands “fencerow to fencerow” to cash in on today’s high commodity prices. CRP payments haven’t risen to compete with crop returns, and the program itself is being whittled away by Congress. 

Again, the amount of land enrolled in the Conservation Reserve Program (CRP), at 27.1 million acres, is down by 26 percent, or 9.7 million acres in the past five years, since the ethanol mandate, to a 25 year low.

North Dakota To Help Solve The Global Warming Problem

Update: what goes around, comes around. A writer suggests that a lot of this newly plowed farmland in North Dakota was grassland for ranchers until the government provided incentives to turn the farmland into ethanol-producing grain. And, thus another reason why I love to blog.

Original Post

ABC News is reporting:

Chevrolet has become the first corporate participant in a public-private initiative that pays farmers NOT to convert natural prairie to large-scale crop production, which would release gases that are warming the planet.

The automaker, a division of General Motors, said it has bought more than 39,000 metric tons of carbon credits from North Dakota ranchers in the prairie pothole region, a broad expanse of grasslands and wetlands reaching across the northern Great Plains and parts of Canada.

"The amount of carbon dioxide removed from our atmosphere by Chevrolet's purchase of carbon credits equals the amount that would be reduced by taking 5,000 cars off the road," U.S. Agriculture Secretary Tom Vilsack said.

Grasslands store huge volumes of carbon dioxide, one of the gases most responsible for climate change. Tilling the soil for agriculture releases the gases into the atmosphere. Preserving grasslands keeps carbon bottled up and preserves habitat for waterfowl and other wildlife.

Near the end of the article:

Participating ranchers place their property in conservation easements that guarantee it will permanently remain grassland, although they can continue grazing livestock and growing hay, which can be planted without tilling the soil.

Chevrolet purchased its credits as part of a 2010 commitment to invest up to $40 million in carbon reduction programs with a goal of keeping 8 million metric tons out of the atmosphere, spokeswoman Sharon Basel said.

The credits Chevy bought in North Dakota will preserve 5,000 to 6,000 acres of grasslands.

I would suggest that oil-millionaire-farmers in western North Dakota quit farming completely, turning their farmland back into natural plains. It's a win-win for everyone.

The farmers no longer complain about the roads, the dust, the oil companies. Oil companies could also buy carbon credits to offset their other sins. Even wind farms could co-exist with the natural plains. And eventually back to the buffalo commons interrupted with a few pumpers.

Readers may be able to help me on this, but I don't think this changes the reality of what has always occurred on the range, where the buffalo roam, and the antelope play all day. Instead of the US government (i.e, the US taxpayer) paying the ranchers not to farm land they wouldn't farm anyway (cattle are now selling for some of the highest prices on record, and ranchers -- by definition -- ranch, and don't farm), a private corporation is paying the ranchers not to farm land they wouldn't farm anyway.

One error in the above, I suppose. I suggested that GM was a private corporation. I believe the "GM" stands for "government motors."

Additional comments: when I first heard of Drs Deborah E and Frank J Popper, my knee-jerk reaction was to resist their proposal. What has happened over the past five years, particularly the ethanol mandate, makes me think the Poppers were more correct than I gave them credit for.

Spearfish, South Dakota, The Scenic Black Hills Becoming Home Of Choice For Bakken Oil Workers -- November 17, 2014

SPEARFISH, S.D. —

Ryan Lambert wants to reap the benefits of the booming Bakken oil region of western North Dakota — but he doesn’t want to live there.

“Do my time and get out, that’s about how I play it,” Lambert said, standing in the kitchen of his Spearfish home on one of his two-week breaks last month.

Lambert is one of a growing number of oil-field workers who make their living in the Bakken but live in the scenic Black Hills, one of the closest population centers to the oil patch that’s benefiting — directly and indirectly — from the highly lucrative boom.

Real estate agents say there’s a housing shortage in the region as workers and retirees buy up homes. Local officials say commercial and residential projects are on the rise. And businesses looking to cater to oil-patch companies are setting up shop in Spearfish and Belle Fourche, hoping to get the business without the headaches.

“You hate to … make your star brighter by making the other guy’s black, but in some sense, the disadvantages of the boom there have (contributed) to the opportunities down here,” said Doug Cole, who started Black Hills Fiberglass more than two years ago in Belle Fourche.

Cole, a retired legislator and construction worker, said it was a smart business decision to base his company that makes 400-gallon fiberglass oil and water tanks out of the Black Hills, which is about 300 miles from key oil cities in the region, namely Williston.