Saturday, May 28, 2016

Road To New England -- Update -- May 28, 2016

Updates

June 9, 2016: The state of Maine's PUC released a report suggesting that more natural gas pipelines are not economically worthwhile. is reporting: The Portland (Maine) Press Herald is reporting:
The staff of the Maine Public Utilities Commission concluded Wednesday that the state’s electricity and gas customers won’t benefit from a plan to spend up to $75 million a year to help expand natural gas pipeline capacity in New England.
The conclusion of a long-awaited report stemming from 2013 legislation was welcomed by clean-energy advocates, who are pushing renewable energy over fossil fuels in order to fight climate change. It was denounced by businesses that use a lot of electricity and natural gas and are desperate to lower their operating costs.
The PUC staff concluded that low oil and gas prices, new pipelines under construction or being permitted, and other factors could temper winter price spikes in wholesale natural gas without ratepayers getting involved.
The report said, in part: “The record in this proceeding does not support a finding that (a pipeline contract) is reasonably likely to provide net benefits for Maine electricity and natural gas consumers under a sufficiently broad spectrum of future scenarios. Moreover, regional market conditions, rule changes and other events suggest that the price and volatility concerns that led to the (2013 law) may be addressed without (a contract).”
And so it goes. We'll see how it all works out. 


Original Post
 
CAVE dwellers kill the Kinder Morgan Northeast Energy Direct pipeline project which would have brought northeast natural gas to New England. With the loss of that source of natural gas, the local natural gas utility had no choice but to suspend new natural gas hook-ups; they couldn't guarantee enough natural gas if they didn't have additional natural gas.

Having killed the Kinder Morgan natural gas pipeline, now those same folks want the local utility to lift the moratorium on new hook-ups. I can't make this stuff up.

The Recorder has the story here but additional googling will provide a more complete story. My understanding is that the Massachusetts Senate president demanding that the moratorium be lifted is among the most liberal in the state and would have been with the group to kill the pipeline.

I may have the story wrong, but that's how I read it.

From May 2, 2016:
RBN Energy: New England gas pipeline update.
More than 3,000 MW of new, natural gas-fired generating capacity is either under construction in New England or will be soon, but some of the gas pipeline projects that would ease long-standing constraints into and through the six-state region have hit rough patches. Kinder Morgan in mid-April suspended plans for its Northeast Energy Direct project, a “greenfield” pipeline across Massachusetts and southern New Hampshire, and a few days later the state of New York denied the co-developers of the already-delayed Constitution Pipeline—a key link between the Marcellus and New England--a needed water quality permit.
The fates of some other major projects in the Northeast are uncertain too. Today, we provide an update on pipelines in the land of Yankees and Red Sox.
We’ve written often about gas pipeline constraints to and through New England, a region with less than one-third the area of Texas but nearly 15 million people, the vast majority of whom believe that Fenway Park is heaven on earth.
New England has been adding a lot of new gas-fired generating capacity, but only modest enhancements have been made to the gas pipeline network that serves the region.
In the unusually cold winter of 2013-14, the lack of sufficient pipeline capacity to meet demand during periods of very high demand sent natural gas prices soaring as local distribution companies (LDCs) with firm transportation contracts took most of the gas and owners of many gas-fired power plants either scrambled for deliverable, high-priced gas or switched to firing their units with fuel oil.
The good folks in western Massachusetts and, for that matter, all of New England might want to read how their comrades in Venezuela are faring. This is from The New York Times published today:
CARACAS, Venezuela — The courts? Closed most days. The bureau to start a business? Same thing. The public defender’s office? That’s been converted into a food bank for government employees.
Step by step, Venezuela has been shutting down.
This country has long been accustomed to painful shortages, even of basic foods. But Venezuela keeps drifting further into uncharted territory.
In recent weeks, the government has taken what may be one of the most desperate measures ever by a country to save electricity: A shutdown of many of its offices for all but two half-days each week.
But that is only the start of the country’s woes. Electricity and water are being rationed, and huge areas of the country have spent months with little of either.
Many people cannot make international calls from their phones because of a dispute between the government and phone companies over currency regulations and rates.
Coca-Cola Femsa, the Mexican company that bottles Coke in the country, has even said it was halting production of sugary soft drinks because it was running out of sugar.
Last week, protests turned violent in parts of the country where demonstrators demanded empty supermarkets be resupplied. And on Friday, the government said it would continue its truncated workweek for an additional 15 days.
Wait till they run out of beer.
*********************
War Stories

Not being reported much in mainstream media right now, but we should be getting reports of unbelievable war atrocities and horror stories in the next 72 hours or so as the Fallujah story plays out. 50,000 non-combatants being used as human shields by ISIS.

Meanwhile, the president is golfing this weekend, based on video being show on local television stations.

As his former SecState would say: what does it matter?

*******************************
A Note for the Granddaughters

Life could not be much better.

Our older daughter, happily married, and living and loving "let's keep Portland weird." Two conservatives -- his idol is John Wayne -- living in the most liberal city in the union.

Our older daughter is in north Texas watching our middle granddaughter play "club-level" soccer. She is in fourth grade. My wife is up there watching them.

Our son-in-law is in Austin, TX, with our older granddaughter, where the latter is in a statewide two-day water polo tournament. She is 13 years old and playing on the high school team.

Meanwhile, I'm with Sophia. Sophia, not quite two years old, is washing dishes. She is easily entertained and the easiest two-year-old I've ever seen to take care of. Let her play in the water at the sink and she can occupy herself for "hours" on end. Right now, she's on the sofa with me waiting for the NBA finals to begin, game 6, OKC Thunder vs Golden State.

She has her raisins and ice water; I have my chips and Coke, and we are just chillin'.

My Girl, The Temptations

Fool Me Once, Shame On You; Fool Me Twice, Shame On Me -- May 28, 2016

This may one reason why companies are not rushing to "activate" idle rigs. Yahoo!Finance is reporting:
So what’s ahead for crude and gasoline as we head into the summer driving season? Scott Shellady, SVP of Derivatives at TJM Investments, told Yahoo Finance’s Seana Smith that he thinks low prices are here to stay.

“The story is lower for a lot longer,” said Shellady. “We’re starting to see some cracks in Saudi Arabia. They might start to unleash more oil on the market… If they really need to start raising some capital and they really start flooding the market, I think that oil up around the $48 to $50 per barrel level is going to be hard to continue.
I expect prices to be around $40 per barrel in August, and I think the new level we’re going to be between is $35 and $50 per barrel.”
*********************************
First Mosque In The US Was Built In North Dakota

A reader sent me this New York Times story:
ROSS, N.D. — Richard Omar drove his pickup truck through the cemetery gate and pulled to a stop in sight of the scattered headstones. As he walked toward a low granite monument, his running shoes crunched the dry prairie grass and he tilted forward into an unrelenting west wind.

“These are my parents,” he said beside a carved granite marker. Then he fixed bouquets of fabric flowers into place with metal stakes, hoping they would last until next spring.

Mr. Omar, a retired electrician, was engaged in an act of filial obligation and something larger, as well: the consecration of a piece of American religious history. This cemetery, with the star-crescent symbol on its gate and on many of its gravestones, held the remains of a Muslim community that dated back nearly 120 years. Up a slight hill stood the oldest mosque in the United States.

The original mosque, erected by pioneers from what are now Syria and Lebanon, had been built in 1929. After it fell into disuse and ruin, the descendants of its founders and the Christian friends they had made over the generations raised money to put up a replacement in 2005.

It is a modest square of cinder blocks, perhaps 15 feet on each side, topped with an aluminum dome and minarets. Several hundred yards off the main highway, on the outskirts of a town with barely 200 residents about 60 miles west of Minot, the mosque and cemetery exist much as they always have, surrounded by fields of wheat and corn and grazing lands. In this spot, all the industrial clamor of North Dakota’s fracking boom feels immeasurably distant.
At the sidebar at the right, way down at the bottom, under "Trivia," I have a link to a VOA story about this mosque. It was one of the first links I ever put up on the blog. 

Everyone in Williston, or North Dakota, for that matter, should have a copy of Prairie Peddlers: They Syrian-Lebanese in North Dakota in their library. Copyright 2002, authors William C. Sherman, Paul L. Whitney, and John Guerrero is an incredible book on the subject. And yes, there is quite a lot written about the mosque. If you don't have a copy, run, don't walk, to Chuck Wilder's "Books on Broadway," in Williston. Tell him I sent you.

Reason #23 Why I Love To Blog -- May 28, 2016

From today's Wall Street Journal: Russia's Long Road to the Middle East.

Over at "The Big Stories" (linked at the sidebar at the right), I have a link to: Putin: Re-Establishing The "Old" Soviet Union.

From today's WSJ story, which in the print edition takes up the entire front page of the "Review" section and the entire second page (with the exception of a regular columnist's essay on the sidebar). Early in the article:
Russia’s long history of involvement—and warfare—in the [Middle East] is largely unknown to Westerners, but it helps to explain President Vladimir Putin’s decision last fall to intervene in Syria’s civil war. Mr. Putin’s gambit on behalf of the Syrian dictator Bashar al-Assad caught many in the West by surprise. Critics have assailed it as a miscalculated bid to replace the U.S. as the dominant outside power in the region.
But when viewed from Moscow, Mr. Putin’s Middle Eastern adventure looks like something very different: an overdue return to geopolitical aspirations that stretch back not only to the Soviet era but to centuries of czarist rule. “The Middle East is a way to showcase that the period of Russia’s absence from the international scene as a first-rate state has ended,” said Fyodor Lukyanov, the head of the Council on Foreign and Defense Policy in Moscow, which advises the Kremlin and other government institutions.

Spicks And Specks; Some Memorial Day Weekend Reading -- May 28, 2016

Some folks have memories like a steel trap or memories like an elephant, as they say.

I don't.


When I look at this graph, I am blown away by two things:
  • the 2009 - 2010 spike; and, 
  • the remarkable decline after 2010.
I think I understand the reason for the decline after 2009 (well, duh -- it's called a) shale; b) stagnating global demand), but I look at the 2009 - 2010 spike and ask, "Why?"

This is where google took me:
Additional links added later, from readers:

A Few Of My Favorite Things -- May 28, 2016

From today's Wall Street Journal, "Heard On The Street":
Oil-supply outages are at their highest level in more than a decade, bolstering the “fear premium” that has helped push crude prices to $50 a barrel.
About 3.5 million barrels a day worth of production is off line because of disruptions such as militant attacks in Nigeria, wildfires in Canada and political unrest in Libya—more than 3% of the global total. That is likely the highest since the Iraq war hit output there in 2003.
At the same time, there is less slack to fill supply gaps. Unused production capacity that the Organization of the Petroleum Exporting Countries can bring on quickly has dwindled, and the glut of output from other producers, including U.S. shale companies, has ebbed as companies cut back amid lower prices.
“There isn’t a lot of extra supply out there,” said Ann-Louise Hittle, lead oil-market analyst at energy-consulting firm Wood Mackenzie. “That’s when you start to get a risk premium back in the market. It is absolutely to be expected and it is, in our opinion, just the beginning.”
My favorite graphs:

Purple arrow: Russia crude oil production.
Green arrow: Saudi Arabia crude oil production.

************************************
Bette Davis Eyes, Kim Carnes