"They" Must Be Reading The Blog -- October 29, 2015

Just a couple of days ago I suggested that we are witnessing a new phenomenon in the United States: the "establishment" of non-government strategic petroleum reserves.

Now, CNBC has brought up the same issue, asking whether we need the SPR any more. There is so much craziness in the article.

The lede suggests that the government plans to sell a lot of oil out of the SPR. In fact, they will sell on an annual basis, 5 million bbls, starting in 2018. North Dakota has choked back oil production and is producing 5 million bbls every five days; unfettered, in a national emergency, North Dakota could easily produce 5 million bbls every two days. And that's just the Bakken. The Permian is bigger and the Eagle Ford is probably bigger.

Then, the article suggests that the SPR oil sale will raise huge amounts of money to fund the government. In fact, we are talking maybe $2 billion. (5 million bbls x $50 = $250 million annually).

Whether it's $2 billion or a fraction of that, both are rounding errors when it comes to the US budget, deficit, and debt.

Then this from an analyst who apparently has never heard of the Bakken:

McNally says that in addition to the sales already planned, the government has been eyeing the SPR to fund another government project — highway funding and transportation.

"If this turns into a feeding frenzy and we sell down our entire reserve, that's where it could become a market issue," McNally said. "We better be sure we'll be at peace, and I wouldn't make that bet." 

According to the article, the SPR stands at slightly less than 500 million bbls. North Dakota produces over 400 million bbls as it is right now, and unfettered could easily double that. 

Another analyst has it partly right:

The barrels set to be sold are "hardly even a blip on the screen," he said. "Down the road it will have an impact [on oil prices], but not as much as other macro elements." 

But this is where he is wrong: bringing 14,000 additional bbls to market each day -- in a market that uses 9 million bbls daily -- will have no effect on price whatsoever. 

The article completely missed the opportunity to talk about the amount of oil being held back in North Dakota and why it is being held back.

By the way, there have now been two stories in the past week that suggests there is a relative shortage of light crude oil for refiners, particularly for refiners on the East Coast. One story was in the Wall Street Journal; the other story was posted by RBN Energy.

The North American Energy Revolution -- October 29, 2015

Before we get to the "main story," here's the weekly natural gas story and gasoline demand data:

Natural gas fill (a dynamic link): 63. In the East Region, stocks were 14 Bcf below the 5-year average following net injections of 33 Bcf.

Gasoline demand (a dynamic link): significant upturn, consistent with historical trends; most recent reporting period, 9.343 million bbls vs 9.157 million bbls one week early and 8.867 million bbls one year earlier. The addiction to crude oil is back, driven by low-priced gasoline.

Now back to the main story.

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North American Oil Revolution

Propane

If there's any doubt in anyone's mind that we are witnessing a North American energy revolution, all one has to do is look at this graphic, and look that our propane exports to even Russia are increasing significantly:

But look at what is going on in the far east.

This is a "big story."

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Every Child Left Behind

Speaking of big stories, this is perhaps the saddest story of the week. This is pathetic. This is criminal. This is beyond belief. Should the NEA be brought up on RICO charges? The only way one gets to 96% failure in education is through a concerted, conspiratorial effort. CNS is reporting (becasue mainstream media won't): in the Detroit Public Shool system, nearly every student fails grade-level reading, math:

In the Detroit public school district, 96 percent of eighth graders are not proficient in mathematics and 93 percent are not proficient in reading.

That is according to the results of the 2015 National Assessment of Educational Progress tests published by the Department of Education’s National Center for Educational Statistics.

Only 4 percent of Detroit public school eighth graders are proficient or better in math and only 7 percent in reading. This is despite the fact that in the 2011-2012 school year—the latest for which the Department of Education has reported the financial data—the Detroit public schools had “total expenditures” of $18,361 per student and “current expenditures” of $13,330 per student.

And that's why President Obama wants to get rid of testing. The truth is very, very inconvenient.  President Obama was provided this data last week; on Saturday, President Obama called for less testing.

State expenditure per student (most recent data from 2011 - 2012):

• California: $58,000
• Iowa: $5,000
• Massachusetts: $14,000
• Michigan: $16,000 (Detroit is in Michigan)
• Minnesota: $9,000
• Mississippi: $4,000
• New York: $52,000
• North Dakota: $1,000
• South Dakota: $1,100 
• Pennsylvania: $23,000

I'm not sure if "free college education" is where our attention needs to be in the 2016 presidential race.

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Notes For The Granddaughters

I am now re-reading Edmund Wilson's Memoirs of Hecate County. I am finally ready to read this book. I've tried reading it twice before, giving up both times.

The first story was "The Man Who Shot Snapping Turtles." Very, very creepy and done the right way, it would be an incredibly good Halloween story.

The second story was a very long short story, "Ellen Terhune." It was a "back to the future story," every bit as good as any Stephen King novel. It was perhaps better, being told in 40 pages vs a 400-page Stephen King ghost story.

The stories are clearly based on personalities Edmund Wilson knew.

Words I've added to the list of works for the oldest granddaughter to add to her list of words to learn (for all I know, she already knows some of these) (page number in parentheses:

• sententious (33)
• dolorous (34)
• vicarious (35)
• Canova Hebe (35)
• plangency (51)
• Gorgon-like (52)

Kemper County Clean Coal Power Plant Will Cost Another $159 Million -- October 29, 2015

Regular readers know my fascination with this story.

Past posts:

• October 16, 2015
• October 2, 2015
• May 23, 2015
• October 28, 2014 
• September 13, 2014
• This story is now tracked here.
  

Here it is again, being reported by Penn Energy:

JACKSON, Miss. (AP) — Further delays and other problems mean Mississippi Power Co.'s Kemper County power plant is likely to cost another $159 million, the company announced Tuesday.

The unit of Atlanta-based Southern Co. made the disclosure on the eve of the parent company reporting quarterly earnings Wednesday.

The total cost of the plant is now $6.4 billion.

Mississippi Power says it will absorb at least $110 million in increases. But the company's 186,000 customers could have to pay another $49.4 million to cover interest, regulatory costs and legal fees if the Mississippi Public Service Commission eventually approves. That decision likely won't come until sometime next year.

Customers have resumed paying 18 percent higher rates for Kemper after Mississippi regulators granted an emergency rate increase when Mississippi Power said it was running out of money. That came after Kemper opponent and Southern District Democratic PSC candidate Thomas Blanton won an appeal to the state Supreme Court to overturn an earlier 18 percent rate increase and force $377 million in refunds. Mississippi Power is in the process of disbursing those refunds.

The plant and associated lignite coal mine were originally supposed to cost $2.8 billion at most, but customers could pay almost $4.2 billion if the Mississippi Public Service Commission approves. The utility is absorbing more than $2 billion in overruns.

Mississippi Power spokesman Jeff Shepard said that much of the cost increase came from last month's announcement that the plant wouldn't go into full operation until as late as June 30. He said that the company needs to spend more to fix problems and keep workers on hand during that extended startup phase.

$2 billion, $4 billion, $6 billion, can I get $8 billion?

The Auctioneer Song, Leroy Vandyke

October 29, 2015

Jack Kemp's weekly energy tweets:

• Total US crude and product stocks fell -3.7 million bbls last week, the largest one-week decline in three months
• US refineries have started to come back from the fall turnaround season and ramp up processing
• US crude and product stocks all well above the 10-year range, except for distillate fuel stocks which are smack dab in the middle and trending down
• US refineries pass midpoint of turnaround season; crude stocks rise more slowly; refined fuel stocks draw strongly 

From the EIA:

US propane exports surging --

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The Silly Season In Massachusetts 
Call It Their "Guilt Tax" 
The State Religion Folks Feel Guilty For Not Having Any Wind Power So They Impose A Carbon Tax To Make Them Feel Good

This will be good for the state: Massachusetts is considering a state-wide price on carbon.

Barrett laid out his plan in Senate Bill S.1747, one of two carbon price options before the legislature. Massachusetts joins five other states—Connecticut, Oregon, Rhode Island, Vermont and Washington—with proposed legislation exploring this option for cutting greenhouse gas emissions.

Although the idea of a carbon price is not new, it is increasingly seen as a key climate solution in the leadup to the U.N. climate talks in Paris in December.

Six major oil and gas companies, including BP, Shell and Statoil, have said they support carbon pricing. In recent weeks, Germany’s Chancellor Angela Merkel and Norwegian Prime Minister Erna Solberg voiced support for a global price on carbon. So have the heads of the World Bank and International Monetary Fund, along with many global leaders in business and politics.

It is very important to note where BP, Shell, and Statoil are headquartered when looking at this.

The really "funny" thing about all this is that if the truth be told, the folks in Boston would love slightly warmer winters. I know; I was there for four winters. Shoveling.

Wind power by state, Massachusetts:

• installed wind power: 107 MW (essentially zero in the big scheme of things)
• state ranking: 34th
• under construction 8 MW (LOL)
• number of wind turbines: 88 (107/88 = 1.2 MW/wind turbine = mom-and-pop operations
• Cape Wind throttled

The carbon tax will help those in Massachusetts who feel guilty. 

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The Silly Season 

For Algore's Contingency, It's Year-Round

I may have to add a new segment to the blog. I may have to steal something from Hillary Clinton. One of her favorite sayings is "this is the silly season" whenever she is personally attacked, and the attack actually happens to be accurate.

With the craziness coming out of the Algore contingency, we may have to add the "Algore silly season." It begins, of course, with the Algore assertion that rising CO2 levels might be making "us" less smart, or as Algore would say: dumb and dumber.

Now, today, the Washington Times is reporting that the US Energy Department says pumpkins cause climate change. The link is still loading; so slow I may not see it today.

US Economy Comes To A Screeching Halt; GDP Collapses -- Reuters -- October 29, 2015

GDP, Reuters is reporting --

U.S. economic growth braked sharply in the third quarter as businesses cut back on restocking warehouses to work off an inventory glut, but solid domestic demand could encourage the Federal Reserve to raise interest rates in December.

Gross domestic product increased at a 1.5 percent annual rate after expanding at a 3.9 percent clip in the second quarter, the Commerce Department said on Thursday. 

The spin comes in the next paragraph:

The inventory drag, however, is likely to be temporary and economists expect growth to pick up in the fourth quarter given strong domestic fundamentals.

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Jobs 

Speaking of spin: "applications barely rise." Monthly average falls to 42-year low.

The numbers:

• actual: 260K
• consensus: 263K
• previous: 259K 

From another source with a lot of blog advertising:

Today's seasonally adjusted 260K new claims was slightly better than the forecast of 263K.

The four-week moving average is at 259,250, down from last week's 263,250, is at a new low last seen in 1973.

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ObamaCare

ObamaCare stories coming out fast and furious as:

• open season begins
• becomes clear that things are not going well
• even President Obama is defunding the ObamaCare co-ops, something the GOP could not do (previously reported); nearly half (eventually, "more than half") of the co-ops will shut down (this was Big Health's plan all along)

By the way, it's not hard to connect these dots:

• President Obama defunds the healthcare co-ops
• the healthcare co-ops collapse
• Big Health moves in, consolidates
• Aetna 3Q15 earnings beat forecasts; increase guidance