Now If They Can Just Stop The Earthquakes -- January 7, 2015

Rigzone is reporting:

Energy Recovery Inc. President and CEO Tom Rooney compares the pumping of sandy water through sophisticated pumps in the hydraulic fracturing process to pouring sand into the oil of a Maserati.

The wear-and-tear of sandy water on pumps still represents a major pain point in the hydraulic fracturing process, despite efforts by oil service companies and others to create a better solution.

The company’s pressure energy technology, which has been widely used in the desalination industry and is currently utilized in sour gas processing and oil pipelines, has now been rolled out to address this “pain point” in the fracking process.

Colorado-based Liberty Oilfield Services will test in early 2015 Energy Recovery’s first manufactured VorTeq device, which transfers high pressure energy from clean water to fracking fluid, which will reduce the cost and downtime associated with the need to repair and replace pumps in the fracking process.

Liberty will conduct the first live well field trials at its operations in Wyoming. The company’s pressure energy technology has been used successfully in the desalination industry as well as in midstream processing facilities and pipelines. At first blush, Rooney didn’t think the technology would be applicable to fracking, in which most of the energy created is used, not wasted. After studying the fracking process, Energy Recovery’s engineers determined the company’s technology could be used to solve the most vexing problem of the process: the destruction of pumps.

Just How Tight Is The Takeaway Issue In The Bakken? -- January 7, 2015

Over the years, I must have read every article and looked at ever graph that depicted takeaway capacity in the Bakken. I always had the feeling that there was adequate takeaway capacity with rail and pipeline. And every day there were stories of more pipelines going in and stories of more CBR terminals.

I always thought "we" were ahead of the game. I looked forward to a bit of slack in takeaway capacity as Bakken oil production (or at least the pace of growth) slowed due to the slump in oil prices.

So, I was surprised when I read this Bakken.com story that said the slump in oil prices is not likely to result in a gain for grain shippers:

A decline in Bakken oil trains isn’t likely to spell good things for Montana grain farmers, according to rail observers.

Getting grain on trains has been a struggle for Montana’s $1.5 billion wheat economy for more than a year, during which time critics have faulted Burlington Northern Sante Fe for leaving grain at the station while hauling more than a half-million barrels of oil daily.
Now oil production seems poised to decline. The number of active drilling rigs in North Dakota has fallen by 14 in the last three weeks, according to the Bismarck Tribune. The price per barrel for oil hit a five-year low Monday.

A slowdown isn’t likely to free up the rails for grain, analyst Terry Whiteside told farmers gathered Tuesday in Billings.

“You would think it would,” Whiteside said. “However, they are telling me in Wyoming they have not found as much oil through horizontal drilling as they have in the Bakken, and that’s probably all going to go westbound. I don’t see it lightening up very much, and then if coal comes on. We’ve just got a very tight capacity problem for a while.”

On top of this, remember: new restrictions on shipping oil by rail. And still it continues. 

51-18-7 -- It's Not About "Cool" Any More -- January 7, 2015; Apple Vs Samsung

Remember that recent posting: after-Christmas mobile device activations -- Apple, 51%; Samsung, 18%; and Microsoft (7%)?

Reuters is reporting:

Samsung Electronics Co Ltd on Thursday said operating profit likely fell 37.4 percent in the October-December period to $4.74 billion, beating expectations.

This would still mark the company's fifth consecutive quarter of declining operating profit in annual terms, and means annual profit fell for the first time in three years.

Also The AP:

Analysts said Samsung's smartphone business, which contributed two-thirds of its profit in the last two years, continued to struggle but improvements in its semiconductor division helped the company rebound from the third quarter, its worst quarter in nearly three years.

Samsung does a lot more than compete with Apple but the other day I mentioned the 51-18-7 data point to a friend.

He suggested that 51-18-7 must mean that Apple still has the "coolness" factor.

Maybe six years ago, or three years ago. But Apple is way beyond cool. The thing I find most interesting about Apple is the number of little things that Apple puts into their devices and software that no one really knows about -- until someone discovers those little "things" and finds a use for them.

I grew up with Apple, starting with my first Apple desktop in 1984 while stationed in Germany.

Disclaimer: this is not an investment site. Do not make any investment, financial, or relationship decisions based on what you read here. I have never owned shares in Apple. I have no plans to start buying shares in the next 72 hours. That seems to be the usual disclaimer / time frame on other sites -- 72 hours. I don't have any plans to buy any Apple shares this week or next week either, but I suppose plans change. It certainly helped me to have Bill Clinton as president; I learned to really parse sentences and read every word.  

I bring up Apple and the "cool" factor for any number of reasons. Nothing specific. I suppose the UE Boom that I recently got my wife really made me sit up and take notice. The UE Boom is an external wireless speaker for mobile devices with Bluetooth capability. I talked about it earlier. It turns out I didn't know much about external wireless speakers either until I got this one, and learned that there are much less expensive options on the market (check Amazon). Interestingly, even if I had known more about external wireless speakers, it would have been a mistake for me to get something other than the UE Boom. It is quite incredible. It beats the Beat Pill just on the "coolness" factor.

What amazes me is how simple the UE Boom was to set up. And I assume it's just as simple with Androids and Samsungs. But, wow, with my wife's iPhone 6, it was incredibly easy. (Just for the record, I don't have a smart phone; never have, never will. My slam-shell [which some call a clam-shell] from 2009, or thereabouts, is simply perfect. Had to get a new battery recently. But I digress.

I am also impressed with the "continuity" function of Apple devices. Instead of trying to explain it, here it is from the Apple website.

By the way, there is a lot more in that AP article on Samsung: it helps me understand where the "i" in iPod, iPad, iPhone is going.

With regard to cell phones, the most recent data, Macrumors is reporting:

The latest smartphone sales data released today from Kantar Worldpanel ComTech highlights good news for Apple on the strength of the iPhone 6 and 6 Plus launch, with Apple gaining share year-over-year in every country surveyed except for Japan.

The report, focusing on the September-November 2014 period, points out that Android market share dropped in most European markets and saw its first decline in the U.S. since September 2013. In the surveyed period, Apple reached 42.5 percent of UK sales, up 12.2 percentage points from the same time in 2013. 

Additional Links In Wake Of The Slump In Oil Prices -- January 7, 2015

Slump in oil prices probably doesn't necessarily mean grain farmers will have better access to wheat-carrying unit trains. The Bakken.com is reporting.

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

A second link, Bloomberg is reporting:

The U.S. exported a record amount of crude oil in November after a five-year run of production growth that has made the country the most oil-independent in 20 years.
Shipments surged 34 percent to average 502,000 barrels a day in November, the most on record dating back to 1920, data from the U.S. Census Bureau and the Energy Information Administration show. The previous peak was 455,000 in March 1957. The U.S. is now the 17th-largest exporter. 

I have to really chuckle. When I first started blogging in 2007/2009 (and deleted the original blog in a moment of insanity) I suggested US oil exports would surge. I did not know there was a ban. A reader wrote to tell me. I checked the law and wrote that the exceptions were large enough to drive a 100-unit oil train through. More of the story:

About 218,000 barrels a day left from northern places like Detroit, upstate New York and Maine. Another 174,000 exited via Texas ports like Houston and Corpus Christi. About 70,000 went through Montana and North Dakota, and 38,000 out of New Orleans.

The U.S. bans most exports of unrefined crude oil. Shipments to Canadian refiners are allowed, as are re-exports of foreign oil, and a few other small exceptions. Congress will discuss repealing the ban in 2015, Representative Ed Whitfield, a Kentucky Republican and chairman of the House Energy and Power Subcommittee, said at a Dec. 11 hearing in Washington.

For now, the existing exceptions are helping producers find higher-value markets for U.S. crude. The U.S. benchmark West Texas Intermediate was $2.50 a barrel less than than international Brent yesterday, from a $13.44 discount a year ago. 

This is a very interesting story. I talked to a CEO of an oil company located in Texas and he said something I never gave any thought to: all oil produced is sold.

Unlike Christmas wrapping that goes on sale after the holidays, and then a lot of it never sold and just thrown away, produced oil is not dumped in the ocean. It ends up going somewhere. The Bloomberg suggests exactly that. Very, very interesting. There's more than just Cushing, Pennsylvania refineries, etc., for Bakken oil. Very, very interesting. 

Much, much more at the linked story.

"A Major Setback" Or Deal-Breaker -- January 7, 2015

The Boston Globe characterizes it as "a major setback." Everything I've read suggests this is a "deal-breaker." There is another interesting bit of trivia in the article that also suggests this is much more than "a major setback."

The story:

The Cape Wind plan was dealt a major setback Tuesday when two power companies that had agreed to buy energy from the Nantucket Sound wind farm terminated their contracts with the developers, raising questions about the future of the $2.5 billion offshore project.

National Grid and Northeast Utilities said Cape Wind had missed the December 31, 2014, deadline contained in the 2012 contracts to obtain financing and begin construction, and chosen not to put up financial collateral to extend the deadline.

More:

In a separate e-mail, National Grid spokesman Jake Navarro said the utility was “disappointed that Cape Wind has been unable to meet its commitments under the contract, resulting in today’s termination of the power purchase agreement.”

Under the 2012 agreement, Northeast Utilities and NStar agreed to buy 27.5 percent of Cape Wind’s production. National Grid had previously signed on to purchase 50 percent.

A Cape Wind spokesman said the developer does not “regard these terminations as valid” because of provisions that, the company argued, would extend the deadlines.

And deep in the story:

Ian Bowles, who as Patrick’s first energy and environment chief helped shepherd the offshore project, said Tuesday’s news may have spelled the end for Cape Wind.

“Presumably, this means that the project doesn’t go forward,” he said in a telephone interview.

The jeopardy in which Cape Wind finds itself reflects a changed energy market, in which developers bear more risk than the eventual ratepayers, Bowles said.

“The risk is on the developer to either build it or not. And in this case, the developer appears to have failed,” he said.

Advances in the state’s renewable energy and efficiency policies have lessened the importance of Cape Wind in its overall energy landscape, Bowles said.

And here is that bit of trivia I alluded to in the beginning, another nail in that coffin:

Governor-elect Charlie Baker is set to take office Thursday. Once a critic of Cape Wind, Baker shifted positions during last year’s campaign, calling the project “a done deal.”

On Tuesday night, a Baker spokesman issued a statement that hinted that the new governor would not interject himself into the contract dispute.

By the way, "...the state's renewable energy and efficiency policies have lessened the importance of Cape Wind...." I assume they mean the state has already backtracked or is likely to backtrack on renewable energy mandates.