Doomsday: US Cities

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June 11, 2020: Chicago facing a "billion-dollar" deficit -- and mayor won't take an increase in property taxes off the table. 

September 21, 2019: small Illinois cities going "bankrupt," ZeroHedge.  But even more incredible: we mentioned this on the blog on August 1, 2010:

East St Louis, IL: Cops, firefighters furloughed; city defers $500,000 bond repayment. The money has run out.  [I remember how "bad" this city was in the 1980's; I can only imagine how much worse it's gotten.] August 1, 2010.

August 29, 2019: update, Wall Street Journal.

July 2, 2019: Chicago facing fiscal collapse due to pension crisis. ZeroHedge.

June 12, 2019: Stockton, CA -- a feel-good story in The Atlantic on how the $500/month program is working out.

February 15, 2019: Stockton, CA -- $500 debit cards to a "select group of 130 residents" start to go out today. $500 / month x 18 months x 130 residents = $1.2 million. See post here.

Stockton, once dubbed “America’s foreclosure capital,” was the largest city to seek bankruptcy protection before Detroit’s 2013 filing. During the recession, unemployment soared toward 20 percent, and violent crime rose. Today, one in four residents lives below the poverty line, according to the U.S. Census Bureau.

Read more here: https://www.sacbee.com/news/local/article226280230.html#storylink=cpy

December 15, 2018: Stockton, CA -- announces basic income pilot program -- $500/month for 100 families; will study how the money is spent.

It’s a deal that might appeal to any U.S. city struggling with a lot of debt. Hartford, Connecticut, won’t be on the hook for its $755 million in debt payments, helping it avoid bankruptcy.

Hartford officials approved a plan Monday night that authorizes Connecticut to pay off the city’s general-obligation debt, part of a lifeline the state extended to the capital city when it enacted its budget last year. While U.S. states have a history of stepping in to help distressed cities, it’s rare for a state to take on debt payments for a locality. [What's the capital city of Connecticut?]

March 28, 2018: even Bloomberg surprised by the bailout Hartford got.

January 27, 2018: all cities in Connecticut -- huge pension concerns.

November 1, 2017: Hartford, CT -- stage budget "removes" imminent threat of bankruptcy.

October 22, 2017: Hartford, CT -- tick, tick, tick. 

September 26, 2017: Hartford, CT -- downgraded again by two credit-rating firms. Increases odds that city will declare bankruptcy by November, 2017.

September 7, 2017: Hartford, CT -- ready to declare bankruptcy; 60 days. 

August 15, 2017: Atlantic City -- now under state control; could still face bankruptcy. 

August 15, 2017: Hartford, CT -- headline story in NYT. 

Hartford has looked to the state for help, only to find that financial situation is also in disarray. The state, which has a deficit of about $3.5 billion, started the fiscal year on July 1 without a budget after months of wrangling in the State Legislature and a resolution could be weeks away. In a symbolic blow, Aetna, the insurance giant that has been based in Hartford for over 150 years, announced in May that it would be moving its headquarters to New York City.

July 11, 2017: Hartford, CT, now junk. Illinois next?

July 7, 2017: Hartford, CT, hires firm to consider bankruptcy filing. Hartford has a deficit approaching $50 million and has asked the state for help managing its fiscal crisis. But the state has its own budget troubles and failed to pass a spending plan to close a two-year hole of $5.1 billion before the fiscal year ended on June 30.

June 11, 2017: update on Atlantic City. It's been one year since the state took control of Atlantic City.
One year after New Jersey Gov. Chris Christie moved to seize control of this cash-strapped coastal city, property taxes are down and municipal bankruptcy no longer poses an immediate threat. But some people still aren't happy.

June 6, 2017: Hartford, CT on the brink. 

June 3, 2017: Hartford, CT -- state considers a $50 million bailout to save Hartford from bankruptcy. 

May 20, 2017: Baltimore, MD -- as good a summary as any I've seen of the Obama legacy. $1.8 billion to Baltimore in stimulus. For every $1 million in stimulus, 1.5 jobs created. No typo: 1.5 jobs. In Baltimore, 1 in 10 residents are heroin addicts. It's a cultural thing, they say.

April 12, 2017: Hartford, CT -- $70 million for minor league ball park puts the city into dire straits. 

December 6, 2016: to some extent, one can argue that Chicago has "survived" due to its access to the White House. That ends January 20, 2017.


November 30, 2016: update on Opa-Locka, FL. Still teetering on bankruptcy?

David Chiverton, a popular Opa-locka manager who once promised to help rescue the city from insolvency, pleaded guilty in federal court on Monday to using his office to pocket thousands in cash bribes from local business owners in one of the largest corruption cases in South Florida in decades.

The 51-year-old administrator is among a cadre of Opa-locka government leaders who were caught shaking down businesses in exchange for permits and water connections during the FBI sting, which used informants who videotaped the illegal payoffs in parking lots, a restaurant and a bathroom in City Hall.

November 30, 2016: update on Atlantic City.

The deal isn’t so much like shuffling deck chairs on the Titanic as it is like moving those chairs from the Titanic to the Lusitania: It may imperil the long-term finances of both Atlantic City and the MUA, the city’s sole remaining profitable asset.

November 30, 2016: update on Harrisburg. 

August 2, 2016: apparently Atlantic City avoided defaulting on a $3.5 million loan, making scheduled payments on August 1, 2016, though it had still not received stopgap "bridge" money from the state as of this date. 

July 27, 2016: Atlantic City may default. July 27, 2016. 

Opa-Locka, Florida: governor declares financial emergency; probably fraud-related;

Atlantic City: could face default at early as this Sunday (in two days). A $1.8 million bond comes due that day. I assume the bondholders will know more ... Monday. -- April 29, 2016

Atlantic City: city government will shut down for three weeks; cash shortfall; the shutdown would start April 8 and likely last until at least May 2, when quarterly tax revenue is set to arrive. Police, fire and sanitation workers would continue to perform their jobs without pay but would be paid when the tax money comes in. -- March 22, 2016

Atlantic City: has been devastated by the quick collapse of its one-time monopoly on East Coast casino gambling and could see its cash flow run dry by April. -- January 27, 2016

EIA Adds A New Database: Monthly Electric Generation In The US -- December 15, 2015

EIA has a new database for tracking monthly inventory and status of US electric generating plants.

Link here for story.

EIA's recently introduced Preliminary Monthly Electric Generator Inventory consolidates currently available information on electric generators into a single product. This new database will enable users to identify monthly changes in generator status and to track units that are being added or retired from the generating fleet.

Monthly tracking of electricity generator additions is particularly important given the rapid increase in utility-scale (1 megawatt or greater) solar generating units, which have been installed at a rate of 24 plants per month in 2015 and account for nearly two-thirds of the total plants added this year. The full database includes 19,914 operating power plants with more than a million megawatts of net summer capacity (as of September 2015), as well as 1,080 planned plants, 2,989 retired plants, and 687 canceled or postponed plants.

The link has been added to my "Data Links" page.  By the way, this "Data Links" page is the best list of energy links on the internet among sites with no ads.

Source: U.S. Energy Information Administration, Form EIA-860, Form 860M

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Real Crude Oil Prices From 1861 To 2015 -- December 15, 2015; China May Call It Quits -- Has Enough

From Mr Badri, tweeting now:

OPEC's Badri does not expect crude oil prices to remain low for more than a year, according to media report.

From John Kemp:

Pretty much tells me all I need to know.

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Meanwhile, China May Call It Quits -- Has Enough

Platts is reporting:

After more than doubling its strategic oil reserves since last year, China may apply the brakes to its buying spree as storage availability is expected to be limited, while a climate of depressed prices will reduce any urgency to snap up cargoes, market observers said Monday.

The National Bureau of Statistics said Friday that China's SPR more than doubled its crude reserves to 26.1 million mt, or 191.31 million barrels by mid-2015, from 91.11 million barrels on November 20, 2014.

The latest reported SPR stock were equivalent to around 29 days of China's crude imports, Platts calculations showed, based on the country's average imports of 6.63 million b/d over the first 11 months of the year, according to data from the General Administration of Customs.

So, China has 29 days worth of import protection. Quick! How much import protection does the US have? More than a year's worth. 450 days to be exact. And that does not count the DUCs. I think US DUCs are adding about 500,000 bopd.

DUCs -- Rigzone Analysis -- December 15, 2015

This is an interesting analysis by the Rigzone staff with regard to DUCs. There are many story lines. This analysis focuses on how fast and how much oil can be brought to the market if the price of oil makes it economical to complete these DUCs.

It's an interesting analysis but I think it has very little to do with the Bakken. Read the analysis and decide for yourself.

But here are my thoughts. (As you read through this, remember that fracking naturally slows during the very, very cold months of winter, and then again during the spring thaw.)

1. They assume the DUCs will all be completed (why would a company drill a well if they did not plan to complete it) but with the caveat that if the price does not support completing these DUCs, some may not be completed. When I first started blogging, the completion (fracking) accounted for about half the total cost; drilling vertically and then drilling horizontally to "total depth" accounted for the other half. With drilling becoming much more efficient and fracking now involving many more stages, more sand, and more water, the costs of fracking have gone up in proportion to drilling. Rigzone puts the total cost at 1/4th for drilling and 3/4ths for fracking.

What they do not mention is that the upfront costs of a) building the road to the pads; b) building the pads; c) laying the pipeline -- water, wastewater, oil -- in some cases; d) paying the upfront lease money for the initial well; e) putting in the storage tanks; f) doing the survey studies from scratch; etc., has all been done. Those were significant costs; if anyone has seen the miles of roads the oil companies have built in the Bakken, they know this is a great expense to have behind them. Yes, I know there are maintenance costs and the roads are probably still being paid off, but ... whatever.

But the biggest factor affecting whether to complete or not complete a well is knowing that these wells will be productive. It's not like these are wildcats and they don't know whether they will have a well or not.

One might want to take a look at the price of oil in 2000 - 2004 when the Montana Bakken boom began. 

2. Rigzone suggests that in one scenario operators will leave the DUCs uncompleted until the price of oil makes them economical, and then at that time, there will be a "mad rush" (my words, not Rigzone's) to complete the DUCs.

NDIC has not given the operators an "infinite" amount of time to complete these wells. In North Dakota, operators have been given an additional year to complete wells, going from one year to two years. I update the status of wells periodically, and note that DUCs are being completed on an ongoing basis. When wells come off the confidential list, whether they have an IP or go to DRL status or become a DUC, I post them at the "news wells reporting" page. DUCs are indicated by SI/NC. When I go back and update the wells, if a well that was previously on the SI/NC list (a DUC), I put the IP in bold blue to show that it was a completed DUC. If it was completed when it came off the confidential list or if it went to DRL status before being completed, I left the IP in bold red.

In the last calendar quarter (3rd quarter 2015) one can see that BR is completing their DUCs in a timely manner. When one looks at 2nd quarter 2015, one can see how few DUCs really remain compared to all the wells that have been drilled. Again, IPs have been put in bold blue if they were previously on the DUC (SI/NC) list. Note how many wells previously on the DUC list as recently as the 2nd quarter 2015 have now been completed. BR and Oasis are completing their DUCs in a timely matter. It appears CLR completes about half their DUCs as quickly as BR and Oasis. Zavanna is not completing their DUCs as quickly; same with EOG for the most part. EOG also tends to put their wells on the TATD list. 

How TATD differs from SI/NC I do not know.

3. Rigzone suggests no one really knows how many DUCs there are. That may be true in states where reporting is not required as frequently as in North Dakota. North Dakota's reporting guidelines probably allow for the most transparency of any state in the union. I think Lynn Helms and the NDIC know within 10% how many wells are on DUC status. We've talked about the reporting regulations many times before.

4. I can't speak to the extent this is true in the Permian or the Eagle Ford, but Bakken DUCs are being placed in the very spots in the basin. The boom went on long enough that the operators know precisely where the best middle Bakken wells are. They did not quite map out the upper Three Forks to the same extent. And the lower benches of the Three Forks have not been mapped out at all, at least in the big scheme of things, or compared to the middle Bakken. These DUCs are all expected to be big wells.

5. The other thing about these DUCs is that they are being placed where there are already any number of wells already producing. It appears there is a halo effect with fracking, and operators may be enjoying some increased production from existing, neighboring wells with a DUC is completed/fracked.

Tuesday, December 15, 2015

Active rigs:

	12/15/2015	12/15/2014	12/15/2013	12/15/2012	12/15/2011
Active Rigs	64	182	191	181	198

RBN Energy: the series continues -- updating Corpus Christi, Texas.

Corpus Christi has emerged as an important crude refining and distribution market hub for Eagle Ford and Permian Basin crude and lease condensate. Corpus has a lot going for it: it’s close to--and well-connected by pipeline with--the Eagle Ford, it has new and potentially growing connections with Permian; and Corpus and its environs boast considerable crude/condensate storage, refining and processing capacity, as well as one of the nation’s busiest ports. 

Today we continue our review of Eagle Ford crude/condensate pipelines feeding Corpus including Kinder Morgan, NuStar, Magellan and Harvest pipelines.

Just over 100 years ago, a San Antonio land-development company, Hurst & Brundage, established the town of Gardendale, TX, seeing promise in the facts that the patch of dry earth was the crossroads of two railroads (the International-Great Northern and the San Antonio, Uvalde & Gulf) and sat atop an aquifer that could support irrigation. The developer’s dream—lush farms, prosperity—wasn’t realized; by the 1940s Gardendale was in decline and in the 1970s a historian referred to it as “a ghost town.” 

Well, Gardendale is anything but a ghost town now. Over the past few years the town has become a hub of hydrocarbon-related activity: railroads moving oil-field equipment and frac sand in, and pipelines and storage facilities managing the flow of huge volumes of crude oil and condensate out of the Eagle Ford (and, via the Cactus Pipeline, inbound from the Permian too). In Episode 1 of this series, we provided a brief refresher course on what lease condensate is (an ultra-light form of crude oil with an API degrees gravity level of 50 or more) and discussed why condensate, with its lighter range of hydrocarbons, is less desirable to Gulf Coast refineries configured to process heavier crudes. We also described the rapid rise of crude and condensate output in the Eagle Ford and the Permian and noted that production from both plays remains high, despite the 2014 oil price collapse. 

In Episode 2, we took a big-picture view of pipelines from the Eagle Ford and Permian to Corpus and Houston, and then started a detailed look at crude and condensate infrastructure in the region with a discussion of Plains All American’s (PAA) Cactus Pipeline from the Permian to Gardendale, as well as PAA and Enterprise Products Partners’ Eagle Ford Joint Venture Pipeline from Gardendale to refineries in Three Rivers and Corpus Christi and to other markets via marine docks at Corpus. (Recall that the Eagle Ford JV Pipeline also can ship crude and condensate to Houston through a connection to the Enterprise Crude Pipeline terminal at Lyssy.)

Today, at the link above, we continue our look at crude/condensate pipelines from Gardendale to Corpus Christi.