It Seems Building The Bridges Should Be The Easy Part -- Just Saying -- Could The Chinese Have Done Better? -- July 24, 2018

Update on the California bullet train from The Los Angeles Times:

Engineers have built about 24,000 bridges in California over the last century, but a new one under construction in Madera County for the state’s bullet train project shows that they can still lead to serious blunders.

Tutor Perini, the lead contractor building a 32-mile section of railway near Fresno, had completed part of a tall highway bridge that would go over future train tracks when the California High-Speed Rail Authority last year issued a “stop work” order. The firm was told to tear down the construction on the Avenue 8 bridge and start over, the agency said this week.

In a statement, the authority said the Avenue 8 bridge design did not meet its “level of quality for a work product” and showed “signs of distress.” Some time after last September, the authority had Tutor Perini start on an entirely different design, agency documents show. The decision has not been previously reported.

The rail authority said it is discussing who will bear the cost of the rework. [We already know: the California taxpayer.]

At least three other bullet train bridges in the Central Valley used the same design as the Avenue 8 bridge and are now being redesigned, according to a January rail authority status update, raising questions about whether potentially more costly designs will be required in the future. The previous design for Avenue 8, using what is known as mechanically stabilized earth walls, is generally considered cheaper than the new design, using cast in place abutments.

The rail authority has acknowledged that it is behind schedule and facing sharply escalating costs, but a new team of executives who took over this year has vowed to make improvements to the execution of the program and re-establish its credibility as the project comes under the leadership of a new governor next year.

***********************************

US Farmers To Get $12 Billion By Labor Day 

Of course, not all $12 billion will be dispersed by then, but the goal is to start getting direct payments to farmers before mid-term elections. Details to follow. American Soybean Association unhappy; says it's not enough.

Can't wait to see lawmakers "vote" against this.

Not inconsequential for the affected farmers but won't "break the bank."

Let's put the $12 billion in perspective. From medium.com:

The U.S. Air Force bought 21 B-2 stealth bombers from Northrop Grumman in the 1980s and 1990s at a price of more than $2 billion apiece, if you count development costs. One crashed on Guam in 2008, leaving 20 in the active fleet. But declining readiness—owing to maintenance and upgrades, wear and tear and cash shortages—routinely grounds 11 of the radar-evading, bat-wing bombers.

Just 21 aircraft for the USAF cost in excess of $40 billion, most of which are seldom flying.

Three International Majors Lead The Pack On Low Greenfield Costs And Low Lifting Costs -- July 24, 2018

Take a look at a couple of articles, presentations. This is interesting.

First, this article highlights three international majors that lead the sector in a) greenfield costs; and, b) lifting costs. This is a big, big deal. Look at the graphic -- the article highlights BP, Shell, and ENI -- the small red arrows.

But look at the "little company" in the far right lower corner: COP. Look at those greenfield costs -- amazing.

This is how graphics can skew things. COP is way to the right (bad). But look at the y-axis. We see the "5" and the "10" on the y-axis but there is no "15." There is very little distance between those on the far left and COP on the far right. I'm not an apologist for COP -- their lifting cost is far to the right (bad). But it is not as bad as the chart might suggest when one looks at the y-axis / range.

But one has to ask, why the huge discrepancy in lifting costs among the four: BP, ENI, Shell, and COP?  My hunch is it has to do with "boe," natural gas vs crude oil.

COP:  from its website, July 24, 2018 --

First, operations --

• Asia, mostly natural gas, I assume, largest segment
• US, lower 48, mostly crude, I assume, second largest segment

Now, some great photos taken from that presentation:

For newbies who have not seen a fracking operation:

Yeah, I'm inappropriately exuberant about the Bakken.

For newbies, COP is represented by Burlington Resources in the great state of North Dakota.

Disclaimer: this is not an investment site. Do not make any investment, financial, job, travel, or relationship decisions just because you like the photos.

Who Would Have Thought? A Shortage Of Railcars For Refined Products, Crude Oil -- Reuters -- July 24, 2018

From Reuters via Rigzone:

U.S. oil refiners as well as producers are frantically looking for ways to reverse a decision by the country’s largest railroad operator, BNSF Railway Co, to curb the use of retrofitted oil tank cars on its railroads as a safety measure after a derailment in Iowa in June.

Reuters reports that this decision could lead to the removal of several thousand oil tank cars from a crucial railway line and up the lease the rates for new cars substantially. Already, two brokers told Reuters, the lease rate for new oil tank cars is over US$1,000 apiece per month, up from US$400 per month at the end of last year.

In June, an oil train derailed in Iowa and spilled more than 200,000 gallons of Canadian heavy crude into a public waterway. Following the incident, BNSF said it will stop offering retrofitted tank cars—of which there are about 11,000 on U.S. railroads—in new contracts. Companies including Exxon, Phillips, and Enbridge use the cars and will be affected by the change.

BNSF’s decision comes at a bad time for shale producers, particularly in the Permian.

The oil rush that some media have dubbed Permania led to a shortage of pipeline capacity in the prolific shale play that has resulted in a discount for crude pumped there as it sits and waits longer than usual to be shipped to the Gulf Coast refineries.

For operators who got into the Permian late and paid upwards of $50,000/acre it's going to be a nail-biting year. One such company has a market cap of $4 billion and debt of $2.7 billion, but their shares are "on a tear" as they say.

Disclaimer: this is not an investment site.

The Market, Energy, And Political Page, T+54 -- July 24, 2018

Free trade. Everyone's for it. But the only one trying to really get "free trade" is Trump. Everyone else, it seems, supports China's a) theft of intellectual property; and, b) high tariffs on American products. And, of course, no one says anything about the Canadian tariff of 275% on US dairy products. In this day and age, why are there tariffs anywhere among these "trading partners": the US, Canada, Mexico, China, EU, Great Britain, Russia, Brazil, and Argentina.

The market. Wow, who would have thought. And why? Up 204 points in early trading (the Dow). More importantly, the S&P 500 up an astounding 22 points and solidly above 2,800.

New record: NASDAQ hits a new record. 

Disclaimer: this is not an investment site.

What's moving?

• Harley-Davidson: up 7%
• UNP: down about 0.75%
• AAPL: up about 0.75% -- wow; 
• S: down about 0.75% -- there seems to be a trend here, LOL
• NOG: up 1.75% -- nice
• OAS: up 3% -- wow
• EOG: up 3% -- wow
• BRK-B: up about a percent
• XOM: up 1.6%

Wow, what's oil doing today? I guess that explains a lot -- WTI is up about $1.00 -- up about 1.4%, now trading at $68.85.

TSLA: on a day the Dow is up over 200 points, TSLA is down about 0.7% -- and TSLA is in a trading range where "speculators" start jumping back in. We will know more by the end of the day.

*****************************

The Modern Art Page

A couple of weeks ago the two older granddaughters were with their dad's relatives in Kentucky. One of the many things they did was learn to weld. It turns out welding is nothing more than really, really strong E6000 adhesive -- but a bit hotter.

The middle granddaughter made a small cityscape sculpture. In the first photo below, the penny is placed there to provide a bit of perspective.

I like this photo better:

Don't you just love the bus stop: trash can, parking meter (or sign), and chairs! Look at the shadow of the sign/parking meter reflected on the skyscraper. And a little bit of leaning tower. I love the "windows" on the skyscraper to the left. And, of course, the Sears Tower in the rear.

The Trump-Putin Summit, The Political Page, Part 2, T+48 -- July 18, 2018

From July 16, 2018: the link.

Putin-Trump summit: I think this was a much more important "summit" than folks seem to think. My hunch: the mainstream media is completely missing the importance of this "summit." Trump also took advantage of being "in the area." He attended the NATO conference in Brussels, which put him within "same time zones" and just hours from Scotland -- he saw the Queen; the Prime Minister; and, his golf course -- and hours from Helsinki which gave him a chance to see Vladimir Putin. Great, great use of time.