Boiler Plate

It's almost impossible not to see this boiler plate:

... Halliburton, formerly headed by Dick Cheney....
.... the troubled Healthcare.gov site...
... controversial practice known as fracking ...

Thursday; The Kashagan Debacle Is Making ObamaCare Website Look Good; Seth Sees Dow Hitting 20,000 By 2018; Young Won't Support ObamaCare -- Critical If ObamaCare Is To Survive As We Know It

Young folks support Obama; won't support Obamacare. 

Mounting opposition to ObamaCare among young adults is creating a new crisis for the White House.

While the federal enrollment website HealthCare.gov appears to be improving by the day, polls show the “young invincibles” key to making the law work are becoming less likely to enroll.

Younger people were skeptical of the healthcare reform law even before its troubled rollout, despite their support for President Obama.

Medicaid is latest health-site victim. Yes, it's a trainwreck, also. We're gonna see the same thing come January 1, 2014, for ObamaCare. Reporting in today's Wall Street Journal:

States are refusing to process Medicaid enrollments from people who signed up through the troubled HealthCare.gov site, citing incomplete information. Thousands who thought they got insurance may not have it.

Active rigs:

	12/5/2013	12/05/2012	12/05/2011	12/05/2010	12/05/2009
Active Rigs	193	181	200	164	66

RNB Energy: Part 3 on the "painful" situation in western Canada.

Expanding Western Canadian Oil Sands production is currently butting up against pipeline constraints to move the crude to markets in the US and beyond. The result is painful price discounts for producers and an increased inventory of crude in storage at the Edmonton and Hardisty hubs in Alberta. New storage capacity is being added in both hubs to handle the growing volume. Today we detail TransCanada and MEG Energy expansion plans in Edmonton.

Observation for the day: the NSA can track 5 billion cellphone locations per day, Amazon can ship over a million line items per hour, and Healthcare.gov can accommodate (maybe) 50,000 people at any one time. Apparently in general, the state health exchanges are in worse shape, and the Oregon website is not even up yet.

The Wall Street Journal 

Drug-cost surprises lurk inside new health plans.

Americans with chronic illnesses—who are expected to be among the biggest beneficiaries of the health law—face widely varying out-of-pocket drug costs that could be obscured on the new insurance exchanges. 

Under the law, patients can't be denied coverage due to existing conditions or charged higher rates than healthier peers. The law also sets an annual out-of-pocket maximum of up to $6,350 for individuals and $12,700 for families, after which insurers pay the full tab.  [As far as I know, this is the ONLY unlimited liability any non-government entity has in the United States. I don't think folks have given this much thought.]

But depending on the coverage they select, some patients on expensive drug regimens could reach that level fast. Some medications for conditions including hepatitis, rheumatoid arthritis, HIV and cancer can retail for thousands of dollars a month, and some plans require patients to pay as much as 50% of the cost.

 Early interbreeding more widespread than thought. This is really, really exciting, coming on heels of James Shreeve's 1995 The Neandertal Enigma: Solving the Mystery of Modern Human Origins. Yes, it's an old book, and I don't generally care for his writing style, but it brought me up to speed regarding human origins. Now this fascinating article comes along. From The Journal:

Researchers analyzing DNA found in ancient bones from Spain discovered a stranger in the mix, suggesting that interbreeding between human species in Ice Age Europe was more widespread than suspected, according to research published Wednesday.

Geneticists led by Matthias Meyer at the Max Planck Institute for Evolutionary Anthropology in Germany extracted the oldest known human DNA—dating back more than 300,000 years—from a fossil thigh bone preserved at the bottom of a cave shaft called Sima de los Huesos—the pit of the bones—in northern Spain, where remains of 28 early humans belonging to an unknown species have been discovered.

By the appearance of their bones, these primitive precursors to modern humankind likely looked most like stocky, barrel-chested Neanderthals. But the genetic analysis reported in Nature showed that their maternal DNA, drawn from special cell structures called mitochondria, was different than that of Neanderthals and also unlike that of more modern humans. It was most closely related to a mysterious species called the Denisovans.

The Denisovans themselves were unknown to science until 2010, when their DNA was first identified from the fingertip of a young female discovered in a cave in Siberia. Her remains dated to about 40,000 years ago, offering evidence that Neanderthals, anatomically modern humans and Denisovans coexisted at that time.

CBR under attack by Sierra Club; they were late on fracking; they won't let the CBR issue get away from them.

I'm beginning to think there's only one story worse than the Healthcare.gov website and that's the Kashagan debacle. Today The Journal reports:

Operators of the giant Kashagan oil field in Kazakhstan are homing in on microscopic cracks in a steel pipeline as they race to understand the cause of dangerous gas leaks that have forced them to halt output indefinitely and could result in hefty repair costs.

Members of the NCOC consortium running Kashagan fear the stoppage could extend well into next year if a technical investigation, launched in October after leaks were detected for the second time in three weeks, concludes that a poisonous mix of hydrogen and sulfur contained in the crude oil has done extensive damage to the pipeline system in the $40 billion project, people familiar with the matter said.

 Disclaimer: this is not an investment site. Do not make any investment decisions based on anything you read here or think you may have read here. 

The Journal is reporting:

When Seth Masters, chief investment officer at Bernstein Global Wealth Management, first predicted the Dow Jones Industrial Average would hit 20,000 by the end of this decade, he said he was ridiculed as a "starry-eyed optimist." 

That was June 2012, not long after the worst of the euro-zone debt crisis. The Dow Jones Industrial Average was at 12,500, some 3,500 points lower than today, a rally of nearly 27% for the blue chips. Now, with the Dow at 15,889, Mr. Masters isn't just sticking by his call, he is moving it up. 

He reckons the Dow could reach 20,000 by 2018, a 26% gain from Wednesday's level. The Dow is up 21% in 2013. "We are actually ahead of schedule," said Mr. Masters, whose firm manages $69 billion in assets.

Gasoline Demand Up As "We" Move Into Holiday Season; Saudi Arabia Sticks With America

The Journal is reporting:

Gasoline prices are rising as the holiday season kicks off, as stronger demand in the U.S. and elsewhere takes a bite out of fuel supplies.

Gasoline futures, which tend to dictate prices at the pump, are up 7.6% in the past month, to $2.7192 a gallon on Wednesday.

Also, The Journal is reporting that Saudi Arabia will stick with America:

OPEC's raison d'etre is to get a high price for its oil. But selling to the highest bidder isn't always the preferred option. Consider the Organization of the Petroleum Exporting Countries' de facto leader, Saudi Arabia. West Texas Intermediate sets the pace for crude-oil prices on the coast of the Gulf of Mexico. It costs about $97 a barrel, a $15 discount to Brent, which aligns more closely with world prices.

All else equal, an oil exporter like Saudi Arabia might send more barrels elsewhere; Asia, say.

Yet U.S. imports of Saudi Arabian crude oil continue to bounce around between one million to 1.5 million barrels per day—roughly the level they have held since the late 1980s. Because U.S. crude-oil imports overall have fallen, 19% of barrels landing in September came from the kingdom, the highest proportion since the summer of 2003.

Why is Riyadh OK with selling all that oil at a discount?

The answer matters for investors in exploration and production companies and refiners. Partly it lies in Saudi Arabia's supply chain. Via its national oil company, it owns half of Motiva, a joint venture with Royal Dutch Shell that operates several Gulf coast refineries, including the 600,000 barrel per day Port Arthur facility in Texas. These are natural outlets for Saudi Arabian crude, and the resulting products such as diesel can then be sold either in the U.S. or exported anywhere at global prices.

Geopolitics is another motivation. The recent interim agreement on Iran has fueled speculation of a growing rift between Washington and Riyadh. Michael Levi at the Council on Foreign Relations reckons Saudi Arabia's leaders might view any foregone oil revenue as "a small price to pay to disabuse U.S. policy makers of the idea that they don't matter anymore." 

This is a great story, something I have talked about often (the Motiva refinery) and would not have known about had I not blogged. There are several story lines in this article that are carried throughout the blog over the years.

Sierra Club To Kill CBR; Late On Fracking Will Not Let This Opportunity Pass

If the Sierra Club can't stop fracking, they will stop CBR. The Journal is reporting:

Companies that thought they had found a relatively easy way to move crude from the booming oil fields of North Dakota to the West Coast are encountering obstacles.

Half a dozen companies are trying to build rail terminals on the coast of Washington state to receive trainloads of crude from the Bakken field in North Dakota. The oil would then be transferred to ships and barges that could carry it to refineries in the Pacific Northwest or south to California. Analysts say regulatory hurdles make it difficult to build the necessary rail yards and tank farms in California, and it's more expensive to ship crude there.

But getting a permit in Washington is proving more challenging than companies expected.

Targa Resources Partners recently called off plans to build a new crude-oil tank farm and rail yard at the Port of Tacoma, saying it was "unable to identify an economical path forward."

The company, which didn't return requests for comment, applied earlier this year to get a permit from a regional clean-air agency that would allow it to ship crude by barge from its existing facility at the port, but that is still being reviewed.

And in the wake of this summer's train derailment in Quebec that killed 47 people, some groups are vowing to stop projects that would increase the number of oil trains rumbling through communities. "The whole enterprise raises serious concerns about the heightened risk of transporting crude by rail," said Devorah Ancel, a staff attorney for the Sierra Club, an environmental advocacy group that has opposed some of the crude-by-rail projects at Washington ports. Companies that want to transport crude by rail say the risks are minimal, and the rewards are great. Refiners have said shipping crude by rail from North Dakota to Washington is a bargain at as little as $10 a barrel, compared with $13 to $16 for a barrel of crude to travel by rail to California and $16 to ship a barrel to the East Coast.

Targa was in the news a year ago when it was announced it would invest $1 billion in North Dakota-Bakken-related operations. I don't know how this latest setback -- calling off plans for a CBR unloading facility in Washington State, Port of Tacoma.

The Trainwreck Simply Gets Worse And Worse

Medicaid is latest health-site victim. Yes, it's a trainwreck, also. We're gonna see the same thing come January 1, 2014, for ObamaCare. Reporting in today's Wall Street Journal:

States are refusing to process Medicaid enrollments from people who signed up through the troubled HealthCare.gov site, citing incomplete information. Thousands who thought they got insurance may not have it.

States are warning that they may not process Medicaid enrollments from people who have signed up for the health program through the troubled HealthCare.gov site, raising the prospect that several hundred thousand low-income people who thought they had obtained insurance actually may not have it.

The federal health-insurance site, which serves residents in 36 states, is designed to sell policies from private insurers. But some people who apply for coverage through the site discover they are eligible instead for Medicaid, the joint federal-state health-insurance program for the poor and disabled.

So far, the federal government has been unable to transfer full Medicaid applications to states, potentially leaving people who sought to sign up for Medicaid through HealthCare.gov without coverage.

In all, some 183,396 people who submitted coverage applications through HealthCare.gov were determined to be eligible for Medicaid through Nov. 2, according to data published by the Department of Health and Human Services. Many thousands more are believed to have received similar assessments in the month since then.

Call it what you want, but the senator's description of this as a trainwreck is about as apt as one can get. The federal site is unable to transfer data to state sites. That shouldn't be all that difficult. Medicaid is state-funded, with federal support, so I doubt cash-strapped states will work overtime to solve the problem.