Who's Afraid of James B. Bullard? April 19, 2022

One day after James B. Bullard, of the US "Fed" says "the rate" will be trending toward 4% by the end of the year:

Also, on the horizon:

• soaring inflation;
• supply chain shortages:
• Chinese lock downs;
• stagflation;
• recession;
• and, of course, it's just a matter of time before they release the krakken
  

There's a really, really good explanation for what we're seeing in the market in early morning trading today. 

But I'm not going there. I don't need the pushback.  

Look at this:

• lowers guidance;
• says Covid vaccine sales will plummet;
• and then this:

• What happened? Increased its dividend by 6%, now $1.13, up from $1.06, quarterly. 

*******************************
The Book Page

On Julia Child's first cookbook.

Director's Cut Posted -- February, 2022, Data

Link here.

Wells off line for operational reasons.

Observations / Analysis

Pending:

Original Post
Director's Cut, February, 2022, Data

Production, crude oil:

• February, 2022, preliminary: 1,089,193 bopd
  
• January, 2022, revised, final: 1,088,631 bopd
• New Mexico: 1,262,557 bopd
• rig count:
• New Mexico: 95 (no typo)
  
• North Dakota: 33
  
• change, bbls: -562 bbls
  
• change: 0%

Production, natural gas:

• February, 2022, preliminary: 2,870,652 MCF/day
  
• January, 2022, revised, final: 2,828,327 MCF/day
  
• change, MCF/day: +42,325 MCF/day
  
• change: + 1.5%

Crude price, NDLS:

• today: $110.75
  
• January, 2022: $74.86
• February, 2022: $86.17
  
• December, 2021: $65.46

Price, revised forecast:

• today: up 119%
  
• February, 2022: up 74%
  
• January, 2022: up 54%
• December, 2021: up 34%

Rig count, oil and gas:

• Today: 36 (report shows 38, but one was SWD; one was double-counted)
  
• March, 2022: 34
  
• February, 2022: 34
• January, 2022: 31
• December, 2022: 32

Wells, permitted:

• March, 2022:  65
• February, 2022: 32
• January, 2022: 39
• December, 2021: 45

Wells, completed:

• March, 2022: 53 (preliminary)
• February, 2022: 90 (revised, unchanged)
• January, 2022: 75 (final)
• December, 2021; 65

Wells, inactive:

• February, 2022: 1,872
• January, 2022: 2,420
• December, 2021: 1,957

Wells, waiting on completion:

• February, 2022: 463
• January, 2022: 449
• December, 2021: 475

Wells, producing:

• February, 2022: 16,746 (preliminary)
• January, 2022: 16,856
• December, 2021: 17,200

Wells, offline for operational reasons, are tracked here.

Not Ready-For-Prime-Time But I Think The Message Is Clear -- April 19, 2022

This is not going to go anywhere -- President Biden is not going to all of a sudden reverse course and green light the Keystone XL, but late yesterday the twitter-verse was full of tweets from north of the border (Canada) and south of the border (the United States) about the desperate need to get the Keystone XL built. 

First of all, it wouldn't change anything before the mid-terms and this is all about politics. 

But, wow, what a doofus. What a huge mistake. There was no need to red-light the Keystone XL -- he had won the elections. No politician wants to make a decision that is irreversible. Killing the Keystone was one of a handful of executive orders that was irreversible. 

See this note from April 17, 2022, with comment from reader who knows this stuff really, really well. Although the Keystone XL was not mentioned, it explains why that pipeline was so important.

This gives me another chance for a shout-out to readers. Wow, I've learned a lot from readers.

My biggest concern when I blog? Stepping on the toes of those readers who know this stuff so much better than I do. As I've said many times, I probably understand one percent of all that goes on in the oil patch. I've learned a lot after a decade of blogging about the "Bakken revolution" but I remain humbled every time a reader who really knows this stuff comments on something I've posted. 

Back to Biden and the Keystone XL. There are two data points to consider: polling numbers and dollars being raised for the mid-term elections.

Polling: the president's numbers are so low two things to note:

• his support has now dwindled to his core, ultra-left constituency who will vote "D" no matter what;
• those numbers cannot go lower but "D" turnout at the mid-term elections could plummet if Biden were to reverse course on the Keystone XL

Dollars: political dollars are maximized on wedge issues:

• with energy, the one edge issue is Big Oil; as long as that issue remains on the table, both sides will raise a lot of cash;
• if today, Biden reversed course on the Keystone XL, not only would he not gain anything in polling, this huge wedge issue would be taken off the table and dollars coming in on this issue would stop immediately
• as long as the Keystone XL remains on the table, dollars will be streaming in

But having said all that, the amount of noise in the twitter-verse regarding the Keystone XL was quite surprising. I really thought the issue was dead. I guess the metaphorical steel stake has not yet been plunged into the metaphorical heart of this pipeline issue.

Director's Cut Should Have Been Released April 14, 2022

Will we see it today? April 19, 2022?

For the archives: delayed due to winter storm Greta. North Dakota snowed in for three to five days. As of Monday, April 19, 2022, still not back to normal. 

Also, there is a possibility of another winter storm coming in.

**********************
Other

Disclaimer: this is not an investment site.  Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here. 

Plug Power: shares surge -- up almost 6% in pre-market

• liquid green hydrogen delivery agreement with Walmart

HAL: 1Q22

• revenue: $4.28 billion vs $3.45 billion one year ago
• consensus: $4.20 billion
• EPS: 35 cents vs 34 cents

JNJ guidance:

• sees full-year sales $94.9 billion to $95.8 billion, down from $95.9 to $96.9 billion;
• shares down 4% pre-market
• should see dividend boost from $4.24 / annual to range of $4.52 - $4.58 / annual
  
• adjusted EPS $2.67 vs $2.58 consensus; earnings being reported today;
• suspends sales forecast for Covid vaccine;
  

Mask mandate:

• airports, airlines ditch mask mandate
• Uber ditches mask mandate for US riders and drivers

Disclaimer: this is not an investment site.  Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here. 

US River System -- Focus On US Southwest -- April 19, 2022

An incredibly good article. A must-read. Archived. 

The thesis:

The US Southwest is in year 22 of a historic megadrought, which a recent study estimates is the region’s driest stretch in the past 1,200 years. This has strained the annual supply from the Colorado River’s many tributaries and heightened awareness and scrutiny of its use. The two largest dams on the river – the Glen Canyon Dam at Lake Powell and the Hoover Dam at Lake Mead – are essential to their respective local power grids. They also supply hard, numerical insight into how strained the water levels have become, with expectations at Lake Powell reaching crisis stage:

“Insufficient runoff has put the reservoir on a quick and dangerous descent to 3,490 feet of elevation – a water level so low that Glen Canyon Dam’s hydropower turbines can no longer operate. A key part of the Western power grid would be lost.

The city of Page and the LeChee Chapter of the Navajo Nation also would lose their drinking water because the infrastructure that supplies them could no longer function.

Not to mention that if Powell falls to 3,490 feet, the only way millions of acre-feet of Colorado River water can flow past the dam and downstream to sustain Lake Mead – the reservoir on which Arizona relies – is through four bypass tubes, which have never handled that kind of volume, particularly for an extended period.”

So Lake Powell's water levels?

All of a sudden, seemingly out of nowhere, Peter Zeihan getting a lot of exposure. From Doomberg this morning:

The Russian invasion of Ukraine and the recent moves in and around the Arctic Circle have caused us, like so many others, to become reacquainted with the work of Peter Zeihan. Zeihan is a prolific author, strategic thinker, geopolitical consultant, and content creator whose views are as well researched as they are strongly held. His book Disunited Nations: The Scramble for Power in an Ungoverned World is particularly prescient, and the fourth chapter of the book – How to Be a Successful Country – is a useful framework for geopolitical study. According to Zeihan, a country’s territorial viability, agricultural capacity, demographic structure, and energy access dictate its relative standing on the international stage. Countless wars have been fought seeking to augment strengths and plug weaknesses along these parameters.

The first factor Zeihan defines as foundational to a country’s inherent strength is its internal natural water system, and few countries are as blessed as the US in this regard. Rivers represent cheap transportation, reliable irrigation for farming, critical fresh water for drinking, and a ready source of renewable electricity. The mighty Mississippi River – and its direct access to some of the most prolific agricultural plains in the world – gives the US an incredible geopolitical advantage. Here’s how Zeihan describes it (emphasis added throughout):

“But America’s Midwest is a place apart: The Greater Mississippi system includes over thirteen thousand miles of naturally navigable, interconnected waterways—more than the combined total of all the world’s non-American internal river systems—and it almost perfectly overlaps the largest contiguous piece of arable, flat, temperate-zone land under a single political authority in the world.”

Inspection of a US river map calibrated for water flow – like the one shown below – is revealing. Two things leap out right away. First, the Greater Mississippi system is truly huge. Second, if we apply Zeihan’s framework to regions within the country, it is obvious that the vastly populated Southwest is overdependent on the flows of the Colorado River. Given the dwindling volumes ushered through this critical channel in recent decades, this reliance is a vulnerability made only worse by the substantial self-interest and political wranglings arresting any alternatives for the region.

Much, much more at the link.