Some Disconnected Rambling

Updates

May 18, 2014: the man behind killing the Keystone. It turns out to be a gentleman who started his own investment company which is heavily invested in a competing pipeline company. LOL.  The man is billionaire environmentalist Thomas Steyer.

The leftwing Steyer undoubtedly is sincere in his green beliefs but sincerity on an issue is easier if you also stand to make a fortune from it. The conservative Daily Caller (Nov. 8, 2013) noted, “Most of Steyer’s $1.4 billion fortune came through investments in fossil fuels. In fact, Steyer’s biggest cash cow is Farallon Capital Management. Farallon has stakes in a number of oil, gas and pipeline companies, including a large investment in Kinder Morgan, an oil and gas pipeline outfit that plans to expand its own TransMountain pipeline to transport oil from Alberta to refineries and shipping terminals in the U.S. and Canada.”

(Steyer actually founded Farallon with $15 million in start-up money.)

Keystone threatens Steyer’s profits in several ways. A glut of Canadian oil would drive down energy costs in America, and the new supplier would be a competitor. But more than anything else, the method of supply would also compete with Steyer’s self-interest.

The Business Insider (June 17, 2013) observed that, if TransMountain’s “expansion is approved, TransMountain will be the only available outlet for Alberta crude.

If Keystone XL is killed, it will leave TransMountain as the only game in town for transporting oil directly from the oil sands to export terminals, up to 900,000 barrels a day. And most of that oil will be shipped west to China.”

No wonder Steyer has not breathed a word of criticism about TransMountain, which is functionally the same as Keystone. No wonder he lobbied against the Northern Gateway pipeline which would take oil from Edmonton to the west coast. It, too, would compete with TransMountain.

Later, 5:29 pm: Chinese bought more US assets in 2013 than they did in nine of the past full ten years. The Wall Street Journal is reporting:

The $9.8 billion in announced deals by Chinese firms scooping up U.S. companies is the highest ever at this point of the year, according to Dealogic. In fact, the year is off to such a strong start that there already has been more Chinese acquisitions announced in the U.S. in 2013 than were announced nine of the past 10 full years, the data provider shows.

Original Post

So, the Chinese are buying our shale assets in Oklahoma and Texas.

The Chinese are buying our pork.

The Europeans are clear-cutting our North Carolina forests for wood chips for fuel.

The IRS commissioner visits the White House a gazillion times more often than Hillary and all the others combined.

And the activist environmentalists are worried about fracking.

Okay.

Take Off, Eh! The TransMountain Pipeline -- February 23, 2019

This is just some housekeeping regarding the TransMountain pipeline in western Canada. Nothing new here.

One hardly needs to make any comments about the National Energy Board's recommendations.

It's actually pretty "funny" for lack of a better word. I think the Canadian NEB was able to thread the needle in such a way to piss off anyone who has a dog in this fight. From what I can tell, this is what the NEB says:

This pipeline is absolutely the worse thing we can be doing when it comes to the killer whales and then there are a few issues with the pipeline route itself, not to even mention that this doesn't help the AGW issue at all. Why don't you just build a pipeline to North Dakota? They seem friendly enough. 

But go ahead, build your damn pipeline, you've sunk this much money and time into it, why not? But if you are really serious about building this monstrosity, be prepared to answer 156 conditions.

Note: I may have written earlier that it was 165 conditions. If I did, my bad. Sorry. I hope that was not material to your thoughts on this recommendation. 

Sort of reminds me of Bob and Doug McKenzie, "Great White North" skits on Second City TV years ago.


Yesterday I posted:

TransMountain: I think I read that the Canadian national energy regulator approved the TransMountain pipeline although the agency said it was "bad" for the environment. The government will now vote whether to proceed. (It will.) And then protests and lawsuits to follow.

Today, from a reader:

Here's the recent NEB document recommending TransMountain approval:

I found it to be page 9 of a 689 page volume.  It's actually titled "i" of the attached

https://www.neb-one.gc.ca/pplctnflng/mjrpp/trnsmntnxpnsn/trnsmntnxpnsnrprt-eng.pdf

Here's a screenshot of the bottom of that page:

Disposition

After completing the Reconsideration hearing and having regard to all relevant considerations, the Board is of the view that the Project is and will be required by the present and future public convenience and necessity, and is in the Canadian public interest. Pursuant to the National Energy Board Act (NEB Act), the Board confirms the recommendation, and replaces certain conditions, that it provided to the GIC in its OH-001-2014 Report. The Board recommends that the GIC approve the Project by directing the issuance of a certificate of public convenience and necessity (CPCN) to Trans Mountain Pipeline ULC (Trans Mountain), subject to 156 conditions. Pursuant to the Canadian Environmental Assessment Act, 2012 (CEAA 2012) the Board is of the view that the designated Project is likely to cause significant adverse environmental effects. Specifically, Project-related marine shipping is likely to cause significant adverse environmental effects on the Southern resident killer whale, and on Indigenous cultural use associated with the Southern resident killer whale. This is despite the fact that effects from Project-related marine shipping will be a small fraction of the total cumulative effects, and the level of marine traffic is expected to increase regardless of whether the Project is approved. The Board also finds that greenhouse gas (or GHG) emissions from Project-related marine vessels would result in measureable increases and, taking a precautionary approach, are likely to be significant. While a credible worst-case spill from the Project or a Project-related vessel is not likely, if it were to occur, the environmental effects would be significant. While these effects weighed heavily in the Board’s reconsideration of Project-related marine shipping, the Board recommends that, in light of the considerable benefits of the Project and measures to mitigate the effects, the GIC find that they can be justified in the circumstances. The Board has identified a recommended follow-up program to be implemented with respect to the designated Project. Pursuant to the Species at Risk Act (SARA), the Board has identified the adverse effects of the Project and its related marine shipping on each SARA-listed wildlife species and its critical habitat, and has imposed (through conditions) and recommended (to the GIC) measures to avoid or lessen those effects and to monitor them.

TransMountain Pipeline News -- All In The Last 24 Hours -- May 5, 2019

Links here:

• 17 hours ago: pipeline bottlenecks cost Canadian produces more than $20 billion last year (2018)
• one day ago: Burnaby loses yet another TransMountain court battle; it is time to stop? Perhaps a judge needs to rule against Burnaby with prejudice.
• one day ago: First Nations see to "control" TransMountain pipeline purchase

Update On The Canadian KinderMorgan TransMountain Pipeline -- Now It's Getting Serious - Wine Boycotts -- March 10, 2018

Update on the Canadian's Kinder Morgan TransMountain pipeline from Alberta to British Columbia that is being held up by British Columbia. Burnaby is back in the news. I've blogged about Burnaby before; here is one link. With a name like that, I keep thinking Burnaby is in Australia. Whatever.

A reader writes:

A relative of ours lives in yuppie, high-rise, water-view Vancouver - so she's surrounded by urbane "Keep it in the ground" pacifist socialists.  She's lived and worked around the world and has a great grasp on the fact that when the USA sneezes, Canada catches cold. 

About a month ago she said it would take an army to get the expanded TransMountain (KinderMorgan) pipeline through Burnaby to the coast.  Just a couple days ago, she totally re-read her tea leaves and said it will happen sooner than she ever thought.

Background tidbit: There's been a tiff between Alberta's Governor Rachel Notley (Alberta wants to ship oil, obviously) and the governor of BC.  Alberta had banned the import of BC wines -- 😏

Trudeau has oddly enough cut through some of Burnaby's red tape in the permitting process.

Anyway - apparently there was some well managed publicity that seemed quite effective.  The gist was that USA was supporting the obstruction of Canadian pipeline expansion in an attempt to sell US oil and decrease Canadian competition.  There was also other publicity along the same lines blaming the Russians.  She summarized by saying that now the argument is framed such that if you don't support pipeline expansion you aren't a patriot.

I chuckled and told her throughout all the twists and turns of DAPL, we had never blamed the Canadians.

So, that's the background. Today, an article from oilprice.com: Alberta is ready to decide on the nuclear option -- stop shipping oil to the refineries in British Columbia! And it turns out the vignette related above is absolutely accurate -- right down to the "wine embargo." From the linked article:

Alberta’s government may be considering a suspension of crude oil shipments to British Columbia in the latest episode of what is turning into a drama series starring Canada’s biggest oil producer and its neighbor who wants to stop the extension of a crude oil pipeline to its coast.

In the provincial government’s Speech from the Throne, Alberta’s Lieutenant Governor Lois Mitchell said that all options for retaliation against B.C.’s opposition to the Trans Mountain expansion are on the table. Mitchell recalled a decision by a former Alberta PM in the early 1980s to reduce oil flows to refineries in eastern Canada by 15 percent in reaction to the federal government’s National Energy Program that Alberta saw as a threat to its energy industry.

[BC took action to stop the pipeline.] In retaliation, Alberta announced a boycott on B.C. wine imports and on electricity imports. B.C. changed its mind about a proposal to change the rules for shipping oil through its territory that would have reduced oil flows for the duration of a study on oil leak response mechanisms. The study would have taken about a couple of years and many saw the proposal as a stalling tactic.

The federal government, meanwhile, has so far proved incapable of making the two provinces kiss and make up. At a recent meeting with the public, PM Justin Trudeau reiterated that Ottawa stood behind the Trans Mountain expansion, and that has been about it from the referee.

With such a history, it was only a matter of time for Alberta to strike back with something bigger than a wine boycott.

I never realized the BC wine industry had that much influence. Truly amazing.

Not Connected To Reality -- BC Prime Minister -- May 8, 2019

For now, the TransMountain Pipeline is being followed here.

For "all" TransMountain posts, click here.

Today, more whining from BC:

B.C. Premier John Horgan has urged Prime Minister Justin Trudeau to use the Alberta-B.C. pipeline he bought to help drivers get past a period of record gasoline prices.

Horgan said he reminded Trudeau about the changing products of the Trans Mountain pipeline, which transports refined fuels, light crude and diluted bitumen from the Edmonton area to port and refinery facilities in Burnaby and Washington state.

“I laid out for him my concerns about the inordinate spike in retail gas prices in B.C., which was not connected to any policy decision, it just seemed to be, in my opinion, gouging,” Horgan told reporters at the B.C. legislature Tuesday.

“I said I was disappointed to see so much diluted bitumen coming into the existing pipe at the expense of refined product. He understood that. He talked about the National Energy Board processes [still ongoing after a court decision delaying the expansion] and he concluded that he would ask his officials to take a look.”

Not connected to any "policy decision." LOL. 

Someobody's crying.

Somebody's Crying, Chris Isaak

MRO With Three New Permits In Chimney Butte -- February 22, 2019

DAPL: unimportant but for the archives.  Link here.

After the DAPL was finally approved/completed/put into operation, the builders sued Greenpeace International and "pipeline fighters" under the US' racketeering (RICO) laws. On February 14 2019, the federal judge hearing the case ruled in favor of the defendants (ruled in favor of Greenpeace). Energy Transfer Equity (formerly Energy Transfer Partners) said they will follow up in state courts in North Dakota.

Comment: I never thought RICO was the right venue for this.

TransMountain: I think I read that the Canadian national energy regulator approved the TransMountain pipeline although the agency said it was "bad" for the environment. The government will now vote whether to proceed. (It will.) And then protests and lawsuits to follow. 

Active rigs:

$57.20	2/22/2019	02/22/2018	02/22/2017	02/22/2016	02/22/2015
Active Rigs	66	56	43	39	127

Three new permits:

• Operator: MRO
• Field: Chimney Butte (Dunn County)
• Comments: MRO has permits for a 3-well pad in SESW 23-146-95;

Six permits renewed:

• QEP (4): four Moberg permits in McKenzie County
• RimRock (2): two Moccasin Creek permits in Dunn County

Two producing wells (DUCs) reported as completed:

• 35328, 1,105, Kraken, Pocasset LW 32-29 1H, Oliver, t1/19; cum --;
• 35327, 737, Kraken, Pocasset 32-29 4TFH, Oliver, t1/19; cum --;

Of interest:

• Oasis had permits for seven Three Forks wells in Williams County; all were changed to middle Bakken wells (#34107, #34109, #34132, #34135, #34234, #34336, #34338)  

The Permian Boom -- Following In The Very Footsteps Of The Bakken Boom -- June 1, 2018 -- A Reader Smells A Rat

Updates

June 2, 2018: see story below in which a writer suggested Kinder Morgan got a $7.4 billion payout for a $550,000 investment. A reader did some of his/her own analysis, after "smelling a rat." This is the reader's entire reply, which is probably a whole closer to the truth than Nick Cunningham's analysis. Remember, he has the same access to information as the rest of us. LOL.

So, there's a May 30 article by Nick Cunningham for OilPrice, which says that Kinder Morgan had only paid $550 million for the existing TransMountain pipeline back in 2007.  His theory was that Trudeau overpaid in the recent taxpayer-funded purchase.  And I'm sure that'll be widely quoted.

I double checked the DAPL numbers, and the original estimate was about $4 billion.  That's close to the price Trudeau paid.  So, then I grabbed my trusty bar room napkin -

• DAPL is longer, but the capacity is about what the increased volume in TransMountain would be ~ half a billion barrels a day total for DAPL and an increase from 300,000 to 800,000 bpd for KM
• DAPL was 99.9 % on private land
• KM had how many tribes to contend with - 50 some?  And you bet your sweet bippy, that's 50 big checks.  The City of Vancouver alone was going to get a billion $.  (Or maybe already has received part/all?)
• I seriously doubted the purchase price was that low - but regardless that was over 10 years ago.  I had a suspicion that whatever original purchase price was cited, Cunningham may have neglected to put a value on debt assumed by the acquiring company.  If I give you $100,000 for your house and assume a $1,000,000 mortgage, obviously that's a $1.1 million transaction - and I've seen that mistake/omission far too often.

So, I had to check to see what the original deal was.  It was 2005, not 2007 - and his numbers were way off.  It was not a stand-alone acquisition, so there's no telling how it was treated for accounting purposes.  (Especially since I know nothing about Canadian accounting).  I can easily imagine that since the existing TM pipeline was 50 years old, that it may have had a much lower depreciated book value.

Anyway - my point is that Trudeau didn't pay a much different price for TM than what DAPL was expected to cost.  KM tossed in the existing pipeline, terminal, etc. and that would increase the value compared to DAPL's barebones pipeline number.  Obviously, there's still an ongoing construction cost for TM, but my understanding is that the pipe is bought and paid for - so it'll just be labor and legal fees.  (;>)  Some of the high-dollar contracting/labor/consulting may also be prepaid - not unusual for big construction projects

The following article is old enough that the TM pipeline isn't really named as such, but it has to be the same critter, because it's the only pipe between Alberta and BC.

I don't have a horse in this race, but the bad reporting on DAPL really raised my hackles - and it looks like there's more of the same going on in Canada.

Kinder Morgan and Terasen Combine to Create a North American Energy Leader

Original Post

Can't wait to spend the money: North Dakota floats idea of spending Legacy Fund money. You know, that Fund that was put in an Algore lockbox. 

Trans Mountain Pipeline Expansion: tea leaves suggest this will not go well even now, owned by the Canadian taxpayer, but the word on the street is that Kinder Morgan did incredibly well.

Kinder Morgan bought the project for $550,000 some years ago, and although the final numbers are yet to be determined, it appears Kinder Morgan got a windfall of somewhere between $4.7 billion and $7.4 billion. Off the top of my head; can't recall for sure. Easily found for those interested. I will come back to it later. Why would Justin Trudeau pay so much for one pipeline? -- It would n't even add much to the overall Canadian economy, nor would it really do much for the Canadian sands. On paper, it makes no sense. At least that's what some are saying. If I can find the link again I will post it.

But this is why:

First it was the Keystone XL. Then Enbridge Line 3. Energy East. Then Trans Mountain Pipeline.  In an earlier post I had mentioned three of those four. I had completely forgotten "Energy East," perhaps the granddaddy of them all. 

From wiki:

The Energy East pipeline was a proposed oil pipeline in Canada. It would deliver diluted bitumen from Western Canada and North Western United States to Eastern Canada, from receipt points in Alberta, Saskatchewan and North Dakota to refineries and port terminals in New Brunswick and possibly Quebec.

The TC PipeLines project would convert about 3,000 kilometres of natural gas pipeline, which currently carries natural gas from Alberta to the Ontario-Quebec border, to diluted bitumen transportation. New pipeline, pump stations, and tank facilities would also be constructed.

The CA$12 billion pipeline would be the longest in North America when complete. The project was announced publicly on August 1, 2013, while the Keystone XL pipeline proposal was being debated. In October 2014, TransCanada Pipelines filed its formal project application with the National Energy Board.

At the same time a number of groups announced their intention to oppose the pipeline.[2] TransCanada cancelled the project on October 5, 2017.

It was obvious Trudeau was never to prevail against faux environmentalists in eastern Canada, but if he couldn't even get a win in western Canada, he could see the end of Canada's fossil fuel industry. Hyperbole? Sure. Possibility? Sure.

It looks like greenfield pipelines in Canada and the US have little chance of success unless they do not cross state lines, provincial lines, or international boundaries.

But Kinder Morgan did just fine, thank you. They get paid regardless. And yes, that's not a typo. They "get" paid, regardless. They got 30-year commitments from shippers to pay them even if the pipeline did not get built.

Disclaimer: this is all based on articles I've read over the past couple of days. It's only what I recall and there will be many factual errors. None of them on purpose. Once I find the links again, if I'm interested in doing so, I will update / correct this post.

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

Back to the Bakken

Active rigs:

$66.40↓	6/1/2018	06/01/2017	06/01/2016	06/01/2015	06/01/2014
Active Rigs	61	48	27	80	189

RBN Energy: rising Permian NGL production drives the need for new pipes. I'm so glad I followed the Bakken as closely as I did starting from the very beginning. The Permian boom is following exactly what we saw in the Bakken boom. For investors, God is giving us a second chance to get it right. LOL.

With Permian production of natural gas liquids (NGLs) on the rise and available pipeline capacity shrinking, midstream companies are in advanced stages of developing projects that — if built on their current schedules — would roughly double the 1.2-MMb/d of effective NGL takeaway capacity in place today within the next 18 months or so. Much of the planned capacity is backed by long-term commitments from Permian producers anticipating continued growth in production of crude and NGL-rich associated gas, especially in the play’s Delaware Basin. Still, the pace of NGL pipeline projects in the Permian begs the question, is all that incremental capacity needed? Today, we continue our series on the NGL takeaway challenges facing producers and processors in cowboy country.

Natural Gas? The Energy Story This Winter? I Thought It Would Be New England. It Might Be British Columbia -- October 23, 2018

Updates

October 26, 2018: follow-up; prices spike.  

Original Post 

Wow, isn't this the height of irony?

Quick! Name the Canadian province that was instrumental in killing the TransMountain Pipeline expansion project (crude oil). Yeah, British Columbia.

Quick! Name the company that built, sold, and if built, will be the operator of the TransMountain Pipeine. Yup, TransCanada. 

So, now fast forward. From oilprice.com and also at the FortisBC webpage:

A natural gas pipeline explosion that occurred earlier this month near the city of Prince George will reduce supply to British Columbia by between 20 and 50 percent this winter, the gas distribution company said in a statement.

FortisBC said that although it had planned on having the ruptured pipe up and running by mid-November, it will not be able to fill it to capacity. At best, it would operate at 80 percent of capacity for the winter.

So, British Columbia is facing winter with a significant natural gas shortage.

FortisBC is turning to -- you got it -- to TransCanada for help.

To compensate, FortisBC said it was in talks with TransCanada to increase the flow along the Southern Crossing pipeline from Alberta. At the same time, the company said, it was working with industrial gas consumers to optimize their consumption. In its update, the company appealed to household consumers to also try and optimize their consumption of the fuel during peak demand season.

I could be wrong but I think TransCanada's Southern Crossing (Gas Transmission Northwest -- GTN) transports natural gas to the US west coast (Washington State, Oregon, and California) from western Canada. One wonders if there could be a domino effect on US west coast. Maybe a reader knows.

From the home page of FortisBC:

Due to transmission constraints, FortisBC is reaching out to customers to let them know that our regional natural gas supply, including the province, will be limited to 50 to 80 per cent of normal levels.

This means that the natural gas system will be challenged in times of high demand throughout the winter. As such, FortisBC is asking all of its customers to be conscious of their natural gas use and conserve energy wherever possible.

On Friday, October 19th, Enbridge released a statement announcing that, subject to regulatory approval, they expect their ruptured 36-inch natural gas transmission line to be repaired and in service by mid-November. However, both the 36 and 30-inch transmission lines will only be running at 80 per cent capacity and are not expected to return to maximum operating pressure throughout the winter.

We are actively working to make more gas available for our customers. For example, we’ve worked with TransCanada to maximize output of the Southern Crossing pipeline that feeds into the Interior from Alberta and are actively working with industrial customers to optimize their energy use – keeping them running while minimizing system impacts. We are also working on securing additional natural gas in the open marketplace to best support the province’s gas supply.

At the FortisBC home page:

Canada Pipeline Update -- May 31, 2024

Locator: 48007CANADA.

Road to Canada: blank check for pipelines.
Road to California: blank check for bullet trains.

Link here.

In a landmark move for the Canadian financial markets, Coastal GasLink LP, partially owned by KKR & Co., is set to initiate the largest corporate bond deal in Canada's history. The pipeline project, located in Western Canada, is preparing to issue up to C$4 billion ($2.9 billion) in bonds to refinance its existing construction debt. This unprecedented offering is scheduled for early June, according to sources familiar with the matter.

The Coastal GasLink project, a 416-mile natural gas pipeline, has faced significant challenges since its inception over a decade ago. Regulatory hurdles, political disputes, and labor issues have contributed to the project's escalating costs, which have more than doubled from the original estimate of C$6.6 billion to C$14.5 billion. Despite these obstacles, the pipeline is nearing completion, necessitating the refinancing of its construction credit facility.

The planned bond issuance, even at the lower estimate of C$3 billion, will rank among the top three largest corporate bond deals ever recorded in Canada. The deal is expected to form part of a broader C$9 billion fixed-income financing strategy for the pipeline, highlighting the substantial financial commitment required to bring the project to fruition.

The Coastal GasLink pipeline is a crucial component of Canada's energy infrastructure, transporting natural gas from the Montney shale formation in Western Canada to the LNG Canada terminal on the west coast. At the terminal, the gas will be converted to liquefied natural gas (LNG) for export, primarily targeting Asian markets. Demand from countries such as China and India is anticipated to support Canadian supply despite competitive pressures from Middle Eastern producers.

 *********************************
TransMountain

Link here.

May 31, 2024 [Reuters]- The Canadian government has guaranteed another C$1 billion ($731 million) in commercial loans for the Trans Mountain pipeline expansion, taking the total government-backed loan facility to C$19 billion, Trans Mountain’s quarterly earnings statement showed on Thursday. TransMountain The expansion project, which has so far cost C$34 billion, nearly triples capacity to ship oil from Alberta to Canada’s Pacific coast to 890,000 barrels per day. It started commercial operations on May 1 after years of delay.

While the oil industry in Canada, the world’s fourth-largest producer, has welcomed expanded access to overseas markets, opponents of the project are critical of the cost to Canadian taxpayers and its environmental impact.

“We’ve basically written a blank cheque to this project,” said Keith Stewart, senior energy strategist at Greenpeace Canada. “This money could have been so much better spent getting off oil and fighting climate change.”

Prime Minister Justin Trudeau’s Liberal government bought Trans Mountain from Kinder Morgan Inc in 2018 to ensure the expansion went ahead but in 2022, as costs soared, said it would no longer finance the project with public money.

Some Canadian Oil Sands Pipelines At Funding Risk -- Headline -- Bottom Line: Inconsequential In Big Scheme Of Things -- July 11, 2017

From Zacks:

Kinder Morgan, Inc.’s KMI Trans Mountain pipeline expansion may not receive funding from Canadian lender, Desjardins, which cited concerns about the project’s impact on the environment. Desjardins had committed $145 million to Kinder Morgan’s Trans Mountain pipeline expansion.

Desjardins, the largest association of credit unions in North America, is no longer contemplating on funding energy pipelines. Per the sources, on Jul 7, the company temporarily suspended lending for such projects and stated that it could finalize the decision. However, a final statement would be made by the lender in September.

Per sources, Desjardins, a financier of Kinder Morgan Canada Ltd's expansion of Trans Mountain pipeline, has been appraising its policy for such lending for months.

If Desjardins sticks to its decision permanently, the association will stop funding other major Canadian pipeline projects, including TransCanada Corp's Keystone XL, Energy East and Enbridge Inc's ENB Line 3.

Such a move would follow that of Dutch lender ING Groep NV, which has a long-standing policy of not backing projects directly linked to oil sands. It is the latest indication that pipelines could face difficulty while applying for funds as banks face pressure from withdrawals.

Data points:

• Desjardins: largest association of credit unions in North America
• ING Groep NV: Dutch lender -- long-standing policy of not backing projects linked to oil sands
• Desjardins: appears to be taking same stance -- backing away from projects linked to oil sands
• Desjardins: had committed $145 million to KMI's TransMountain pipeline expansion; apparently re-appraising that commitment; decision to be announced September, 2017
• Desjardins decision: if Desjardins sticks to decision permanently, it would not fund -- TransCanada's Keystone XL, Energy East; and, Enbridge's ENB Line 3

That's fine.

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

Best State To Start A Business

As soon as I saw Minnesota one place above Texas, I knew the rankings were bogus. The problem: too much weight placed on "education."  Take education off the list of parameters used and Minnesota would be at the bottom of the list. An educated work force is incredibly important but it's not as if Minnesota has a moat around the state when it comes to education. Whatever.

WTI Heading For A "64-Handle" -- February 23, 2018; Turkey Becoming Unhinged; Enerplus Crushes Earnings Forecast

Wow, I almost missed this -- I'm not sure what "suggested" I check the oil market at this moment, but there it is, WTI about $63.63. Remember: most operators in the Bakken, according to their 4Q17 earnings presentations are "cash-neutral" at $45 - $50. I don't think I saw any operator said they were "cash-neutral" at WTI greater than $50. The number to watch: $63.63.

From oilprice.com, all in 24 hours:

Note: I did not look at many or listen to many presentations but the few I did ...

Enerplus: quarterly profit beats expectations.  27 Canadian cents/share vs 17 Canadian cents/share. ERF shares up 7% today.

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

Other News

Canadian Kinder Morgan's TransMountain: British Columbia backing down? It appears Alberta oil may, in fact, reach the west coast despite objections of "British Columbia."

Turkey becoming unhinged: Turkey's navy threatens to sink Eni drilling ship offshore Cyprus. Go ahead, do it. And kiss your aspirations to be a full member in the EU goodbye. Wow, what idiots. (Yes, I know there's a bit more to this. But not much.)

Wow, Mexico to emulate Venezuela? The front runner in the Mexican presidential election?
A "leftist" candidate who plans to "scrupulously review" his countries oil sector policies. Wants to discontinue crude oil exports to the US. Wow.  From wiki:

As in the 2006 and 2012 elections, the 2018 campaign has featured numerous accusations and attack ads directed at the leftist frontrunner candidate Andrés Manuel López Obrador (AMLO), who will be contesting the elections with the support of his party MORENA ("Movimiento de Regeneración Nacional", "National Regeneration Movement"). 

A Red Scare-like campaign has been used by the PRI and PAN candidates to convince voters that an AMLO victory would turn Mexico into "another Venezuela". In a speech, PRI president Ochoa Reza stated that "if the people from MORENA like Venezuela so much, they should just go and live in there".

The wall: come 2021, even the Californians will want that wall. See previous note above.

Oil imports from Mexico:

• 800,000 bopd: US imports from Mexico
• generally heavy to medium-light; sulfur content
  
• Isthmus: 21.8°.3.3% sulfur
• Maya: 33.4°; 1.35% sulfur
• Olmeca: 37.3°; 0.84% sulfur

Chevron Gets Out Of The Renewable Energy Business

Earlier I posted a note on the collapse of "green-energy" jobs in Germany. I was alerted to that story by a reader; it is a story not yet being reported in American mainstream media.

Shortly after receiving that link, I was reading a recent issue of Bloomberg Businessweek. I canceled my subscription but am still receiving the "last" issues -- I discussed "why" some time ago. My granddaughter saw the cover of this most recent issue and thought it was a teen magazine. Based on that comment, I knew I had made the right decision to cancel the subscription. See if you agree.

Having said that, there were two articles worth mentioning in this issue. I forget what the first article was; I'll have to go back and look. The second article was almost a full-page long: "An Oil Giant Dims the Lights on Green Power."

Oh, yes, that first article, how could I forget: "Who Cares About Keystone XL?" A fairly long article for BloombergBusinessweek with a very nice graphic. And yes, KinderMorgan's TransMountain pipeline was featured -- the one that Steyer has invested in. You know Steyer: the activist environmentalist who was instrumental in seeing the Keystone XL killed. Instead of taking a huge pipeline through the desert of western Nebraska to American refiners, he wants to take the same huge pipeline through the Canadian Rockies to ship western Canadian oil to China. LOL.

But I digress. Back to the Chevron article:

In January, employees of Chevron’s renewable power group, whose mission was to launch large, profitable clean-energy projects, dined at San Francisco’s trendy Sens restaurant as managers applauded them for nearly doubling their projected profit in 2013, the group’s first full year of operations. But the mood quickly turned somber. Despite the financial results and the team’s role in helping launch more than a half-dozen solar and geothermal projects capable of powering at least 65,000 homes, managers told the group that funding for the effort would dry up and encouraged staffers to find jobs elsewhere, say four people who attended the dinner.

For the past eight years, Chevron has promoted “profitable renewable energy” as a core component of its business plan. The company’s slogan, “Finding newer, cleaner ways to power the world,” is splashed across its website. And ads launched in 2010 as part of Chevron’s “We Agree” campaign declare, “It’s time oil companies get behind the development of renewable energy.” Yet Chevron recently has retreated from key efforts to produce clean energy. This includes the renewable power group, which invested in or built utility-scale solar and geothermal projects with margins of 15 percent to 20 percent or more, according to a dozen people who worked on the projects.

Chevron earlier this year sold the 48-person business unit that builds small solar and landfill-gas systems and energy-saving retrofits for federal agencies such as the U.S. Department of Defense. Jim Davis, president of Chevron Energy Solutions for the past 14 years and the executive in charge of many of the oil giant’s clean-energy pursuits, left the company in March. Davis didn’t respond to requests for comment.

Did the tax credits run out?

I've always been fascinated with strategic planning by public companies, and with their "vision statements." I've often said that businesses become / remain successful when they can successfuly identify the business they are in. I was very, very happy to see companies like BP, Enbridge, and CVX engage in renewable energy. It told me they saw themselves as energy companies, not simply fossil fuel companies, or even more limited, oil and gas companies.

As an investor in CVX, this change is no big deal. The profits generated by the CVX-renewable group were a rounding error. For a small rounding error, the company was getting huge positive PR and a seat at the table of renewable energy.

So, when CVX drops renewable energy completely there have to be a lot of story lines. Here goes.

The first story line is this: even though CVX sponsored some (albeit very little) renewable energy projects, it didn't get them a seat at President Obama's renewable energy table. CVX might have gotten a seat somewhere in the room but for all the clout the company had (based on market cap) they weren't seated too close to the big guy. After awhile, it gets personal.

Second, note the timing: the announcement comes near the end of the Obama presidency. Early on, CVX did not know which way the tea leaves would float and hedged their bets. Now, with less than a thousand days of this presidency, the writing is pretty much on the wall, and the final graffiti will be posted tomorrow. Contrary to his speeches, President Obama's energy policy is NOT "all of the above."

A third story is the nut of the story: Chevron is getting out of renewable energy simply because the industry is collapsing. Chevron may see itself as an energy company but "renewable energy" is not even big enough to be a niche going forward. I came across this Chevron article in BBW at the very same time as I received the link to "Germany green-energy jobs collapse." It doesn't take a Greenpeace activist to sort this out. Even in the most pro-environmental country in the western world, the industry is collapsing. [The best Greenpeace was able to do in its most recent multi-million dollar venture was to delay Statoil from drilling in the Arctic by 89 hours. Yes, 89 hours. And Greenpeace said it was happy with that "success."]

One of the reasons I'm a poor investor is that I'm not a detail person, which brings us to our fourth story line. Again, from the article:

A pullback from renewables doesn’t surprise some analysts, who say returns of even 20 percent can be bested by oil and gas projects that can generate profits of 25 percent to 35 percent. “Renewables for oil companies are sort of like the coffee shop inside Bloomingdale’s,” says Oppenheimer analyst Fadel Gheit. “On their list of priorities, it will always be at the bottom.”

As a less-than-great investor, I don't get excited about 20 percent vs 25 percent margins as a stand-alone reason to buy into something or to jettison something. If renewable energy had a future, a CEO would be willing to accept 20 percent vs 25 percent for a bigger payoff down the road. This sounds like CVX realizes there is no payoff down the road for renewable energy.

The fifth story line is really part of the fourth story line: 20 percent returns are nothing to scoff at. Is your savings account, or even your investment portfolio, providing you 20 percent returns year-after-year? Not likely. The fifth story line? "Yes, I like 20 percent returns, but when it's a rounding error, and I have to look at three PowerPoint slides every month on renewable energy, this stuff becomes a distraction. It takes my focus off the stuff that really counts. Let's go golfing. And s**tcan the PowerPoint slides on renewable energy."

I don't remember where I saw it, or if it was even connected with this article, but someone commented on why it was important for Big Oil to remain committed to renewable energy. The argument was this: renewable energy is the energy of the future, and to ignore it puts companies like Chevron at big risk. The example: Kodak probably wishes it had paid closer attention to digital photography. That brings us to our sixth story line: CEOs and many people on the boards of directors, which often include the likes of Algore, are not dumb people. In addition, they are movers and shakers who will drive the story lines for the 21st century.

So, I guess two more story lines. Assuming smart guys like Algore sit on these boards and they eschew renewable energy, what does that tell the rest of us? Finally, the last story line (for now): good, bad, indifferent, when companies like Chevron get out of renewable energy that was actually returning twenty percent, what does that tell investors about the future of renewable energy?

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This story on CVX, an earlier story Spain (Iberdola), and Germany's return to coal is a trifecta: Spain, US, and Germany and the future of renewable energy. I track the "big stories" here, including "Europe At A Tipping Point." I've marked my calendar: June 1, 2014: the beginning of the end of renewable energy. 

Mexico Halts All New Upstream Auctions For At Least Three Years -- December 5, 2018

Mexico. When President Obama killed the Keystone XL it was clear he did not understand energy.

Now, just as clearly, Mexico's new president does not understand energy. The Mexican president has halted upstream auction rounds for three years.

He rationalizes why he has taken this move, but it is clear he does not understand how the oil business works.

Story at S&P Global / Platts.

The postponement of auction rounds will have a long-term, material impact on Mexico's oil and gas output, according to a transition report issued by the outgoing administration of Enrique Pena Nieto over the weekend.

According to the report, by halting auction rounds by two years, Mexico's output will only reach 2.46 million b/d by 2027, not 3.07 million b/d. Similarly, if auctions continue, Mexico would produce 7 Bcf/d of natural gas by 2028, 640 MMcf/d more than if the lease sales are shelved for two years, it said.

But does it matter in the big scheme of things? Nope. Look at what the outgoing administration is quibbling over: 2.5 million bopd vs 3 million bopd. Inconsequential in the big scheme of things.

One wonders how much Canada is losing due to faux environmentalists: Northern Gateway (killed); TransMountain (killed);  Keystone XL (killed); Line 3 (delayed, possibly killed).

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Macron Caves On Green Energy Tax

Updates

December 6, 2018: Considering how little France contributes to global CO2 this whole exercise seemed ludicrous. Add that to Macron's suggestion that France needs its own army to protect itself against Russia or  the United States makes me wonder how really "batty" this guy is. He's starting to make Occasional-Cortex look like an Einstein. Article at ABC News. 

Original Post

France: "most taxed" country in 2017, and still Macron not satisfied. France overtook Denmark as the most taxed country in 2017. Link here. The few examples given in the article are quite interesting.

The Organisation for Economic Cooperation and Development (OECD) said on Wednesday overall government tax revenue on average reached 34.2 percent of gross domestic product (GDP) last year among 34 developed countries for which the Paris-based body compiled data.

Though up only slightly from 34.0 percent in 2016, the figure was the highest average overall tax take since the international policy forum’s records began in 1965, it said.
In France, tax revenues rose to 46.2 percent of GDP, surpassing Denmark, where the ratio fell to 46.0 percent. 

• Mexico: lowest at 16.2% of GDP
• US: 27% of GDP; if one includes state and property income tax, one wonders how high the US tax rate would be
• Israel: 32.7% of GDP

Making Texas Great Again -- September 5, 2018

Making Texas great again: see notes below regarding Canadian railroad ordering 60 more locomotives from GE. It turns out that these locomotives will be made in the GE plant in .... Ft Worth. Beautiful, beautiful facility and beautiful, beautiful location.


Fast and furious:

• Mother Nature canceled hurricane season this year: Gordon blew through becoming nothing more than a summer shower; next drenching won't enter the Gulf for ten days.
• Open book test: we've been talking about this ever since the TransMountain Pipeline Expansion project was killed -- CN orders 60 more locomotives from GE Transportation. Didn't GE sells it GE rail business?  See next data point.
• Exit. Under the terms of the deal, GE -- in a story dated just four months ago-- will be required to unload its "railroad" stake within three years, making an exit from the rail business.

  GE's rail business was booming in 2014 thanks in part to high prices for metals and oil. However, the industry hit a snag in recent years as commodities slumped, leading GE to decide to back away.

• CNI dropped 1.5% yesterday; paying 1.55% 
• Permian growth to slow: according to Schlumberger; due to takeaway constraints. Saw the same thing in the Bakken at this point in the cycle. Yawn.
• How important is the Trans Mountain Pipeline for Canada? Justin sums it up nicely:
  

  Speaking at an event in Vancouver today, Prime Minister Justin Trudeau said his government is committed to moving ahead on the project "in the right way" — but did not offer a timeframe.

  "All we have to do is look at the headlines to understand that being a prisoner to the United States for our resource exports, knowing that right now we only have one market, the U.S., for our oil exports, is simply not a wise strategy for Canadians moving forward," he said. "We need to get new markets for our oil resources."

  [Comment: his very nuanced/calm response suggests he is, behind the scenes, scrambling to get this done.]

• Graphic of the day: at this link. X-rated; for adults only. Sort of.

Overused but I need some music to feed my brain (with apologies to Hunter S. Thompson) --

I Won't Back Down, Tom Petty
API weekly crude oil inventories, this afternoon: link here. The build of 1.551 million bbls was slightly greater than the 1.460 million bbls forecast. Mostly background noise, in the big scheme of things.

Costs to drill an oil well: from 2016, but looks pretty good.

Making America great again: two Louisiana projects would double US LNG exports -- wow, see below.

Tariffs? What tariffs? From Reuters. China appears set to once again boost its purchases of liquefied natural gas (LNG) for the northern winter, but unlike last year's rush, this time the process is likely to be more organised and stable.

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Back to the Bakken

One well coming off the confidential list today (it was miserably cold and harsh in North Dakota six months ago):

Wednesday, September 5, 2018

• 34232, SI/NC, Crescent Point Energy, CPEUSC Lloyd 3-27-34-157-100W MBH, Marmon, no production data,

Active rigs:

$69.10→	9/5/2018	09/05/2017	09/05/2016	09/05/2015	09/05/2014
Active Rigs	62	57	33	75	196

RBN Energy: Venture Global's two Louisiana projects would double US LNG exports.

December 15, 2024: Plaquemines up and running. Link here.

The race is on to be the first to reach a Final Investment Decision (FID) for the next round of U.S. liquefaction/LNG export terminals along the Gulf Coast. And like the Kentucky Derby, being first — or, at worst, second or third — is a do-or-die proposition, because only a very small number of these projects are likely to line up the multibillion-dollar commitments needed to push them over the FID line.

The tried-and-true approach of LNG project financing has been to secure a stack of long-term Sales and Purchase Agreements (SPAs) from international LNG trading companies or huge overseas utilities, and that’s the tack being taken by Venture Global LNG, which is developing two projects near the Louisiana coast that, if built, would consume a total of nearly 4 Bcf/d of U.S. natural gas. Today, we continue our series on the next round of liquefaction/LNG export terminals “coming up” with a look at Venture Global’s Calcasieu Pass and Plaquemines projects.

This is the third episode. Earlier we reviewed the dramatic shift in U.S. expectations regarding LNG a few years back. Through the 1990s and the first two-thirds of the 2000s, U.S. natural gas production was close to flat, so the general thinking was that U.S. gas output had peaked, and that over time, increasing amounts of LNG would need to be imported to keep pace with gas demand. In 2005, the Energy Information Administration (EIA) estimated that the U.S. would be importing the LNG equivalent of nearly 12 Bcf/d by 2015 and 18 Bcf/d by 2025, and a number of LNG import terminals were built to handle the expected inflow. 

It became clear by 2010-11, however, that the Shale Revolution — and the resulting boom in U.S. gas production — had eliminated the need for LNG imports. In a flash, many of the companies that had just finished building LNG import terminals started exploring the possibility of adding liquefaction plants at those sites to export LNG instead. Since then, six liquefaction/LNG export projects advanced to FID and construction — Cheniere Energy’s Sabine Pass and Corpus Christi, Dominion’s Cove Point, Cameron LNG, Freeport LNG and Elba Liquefaction — and five liquefaction trains (four at Sabine Pass in southwestern Louisiana and one Cove Point in Maryland) with a combined capacity of more than 23 million tonnes per annum (MMtpa) are up and running. 

Then, we did a deep dive on Tellurian’s Driftwood LNG, a 27.6-MMtpa liquefaction/LNG export terminal planned for an 800-acre site in Louisiana’s Calcasieu Parish, south of Lake Charles. 

Several aspects of Tellurian’s project bear repeating here. One is that, in contrast to the large-scale liquefaction trains now operating at Sabine Pass and Cove Point and under construction along the Gulf Coast (generally with capacities of 4 MMtpa or more each), Driftwood LNG will consist of as many as 20 much smaller, modular-based trains (1.38 MMtpa each). Also, Tellurian is acquiring natural gas reserves that will be tapped to produce gas for the LNG project, and it is developing two 2-Bcf/d long-haul pipelines (Permian Global Access Pipeline, or PGAP, and Haynesville Global Access Pipeline, or HGAP) — and a 96-mile, 4-Bcf/d connector called Driftwood Pipeline — to deliver most of the natural gas that the Driftwood trains will demand. 

Most important, perhaps (and most relevant to today’s discussion of the Venture Global LNG projects), is that to help finance its project Tellurian is seeking a handful of customer/partners that would take a combined 60% to 75% equity interest in Driftwood Holdings, which consists of Tellurian Production Co. (a gas producer), Driftwood Pipeline Network (the pipelines discussed above) and Driftwood LNG Terminal (the liquefaction trains and export docks). Those stakes — at an estimated cost of about $1.5 billion per MMtpa of liquefaction capacity — would give the customer/partners equity LNG at the tailgate of the liquefaction trains at cost, with the variable and operating costs estimated to be about $3.00/MMBtu FOB (free on board — that is, with the LNG owner responsible for shipping the LNG to its destination). Tellurian will retain the remaining 25% to 40% equity interest in Driftwood Holdings, and will market its share of LNG production on its own. It also will manage and operate the pipelines, liquefaction trains and export docks.

Huge Energy Stories Breaking Overnight -- November 16, 2021

Each of these deserves a stand-alone post today. Huge stories breaking overnight. 

• Canada's TransMountain pipeline -- Canada's only pipeline that carries both crude oil and refined products to the west coast -- is temporarily shut down due to storms, rain, and flooding -- global warming?
• XOM calls it quits: says it will sall Barnett shale assets in Texas; I've seen $500 million figure;
• Russia's biggest move yet to take control of European natural gas market: 
• Germany suspends Nord Stream 2 certification
• two days ago, COP26 voted to suspend fossil fuel subsidies: overnight Japan announces fossil fuel subsidies to manage surge in prices
• keep an eye on Japan's power price rally: electricity rates for next-day delivery rose to a record for this time of year 
• high fuel costs (not news)
• cloudy weather cuts solar: weak available power supply vs last year
• the Bakken: huge headline story in the Financial Times: behind a paywall; "The birthplace of America's oil boom a decade ago is struggling to recover from last year's market crash even as crude prices have surged back to $80 a barrel"
• not to worry: consider the source
• same ol' stuff
• article seems to be in response to CLR's entry into the Permian
• the number of private jet flights has set a record in each of the past six months leading up to COP26 
• Platts feature on ISO NE
• Chinese's gambit in North Dakota: more than meets the eye

Links later but need to get ready to walk Sophia to school bus.

TransMountain Update -- By Then It Would Be Winter -- June 19, 2019

Hope springs eternal: the approval came to late to get this project started/completed this year. This will carry over into 2020. Something tells me the legal and political wrangling is not yet over.

Think I'll go out to Alberta
Weather's good there in the fall
I got some friends that I can go to working for
Still I wish you'd change your mind
If I asked you one more time
But we've been through that a hundred times or more

Four Strong Winds, Ian and Sylvia

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Definition of Insanity

I don't think folks realize that once the bill is passed, "no-growth" begins immediately. Any new project, any new development, anything that "requires" energy will need to be approved by the Climate Action Council.

With "social justice" a major component of the law, I see a lot of lawsuits against corporations with deep pockets. 

Link here.

The legislation calls for reducing emissions by 40% from 1990 levels by 2030 and 85% by 2050. The remaining 15% of emissions would be offset, making the state carbon neutral. The bill would also require that all electricity generation come from carbon-free sources by 2040. A Climate Action Council would be established to ensure the state meets its targets.

From the article:

New York has considerable ground to make up. The state cut emissions only 8% between 1990 and 2015, according to the most recent New York greenhouse gas inventory.

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This Calls For A Drink

From The Wall Street Journal, Scotch breaks with tradition to woo new drinkers. A governing body is relaxing rules over how to produce the spirit, giving in to demands by distillers.

To count as Scotch, the spirit must be distilled in Scotland from water and malted barley and aged in the country for three years in oak casks.

The Scotch Whisky Association, which enforces how Scotch is made and marketed, has for years also required distillers to mature and finish the drink in casks traditionally used by the industry, limiting producers mainly to old sherry, cognac, bourbon or port barrels.

Now, in a rare change to the rules, it will allow a wider variety of casks, including those previously used to age tequila and mezcal, cachaça, shochu and baijiu and other fruit spirits.

Paul Miller, owner of St. Andrews-based Eden Mill Distillery & Brewery, hopes that access to a wider range of casks will decrease prices. Standard bourbon casks cost him over £100 ($125), while wine casks can range from £80 to £200 depending on provenance, making them among his biggest outlays.

I honestly don't think it's the cost of Scotch that is the problem.

Afternoon Note -- October 23, 2018

WCS: how much is Alberta "losing" because the TransMountain Pipeline expansion was killed? $100 million / day. Per day. Around $60 million / month goes into the North Dakota Legacy Fund. Divided by 30 days that works out to $2 million / day. Compare that to $100 million / day in Alberta. British Columbia's First Nation is costing Alberta $100 million / day.

Colorado: the top 2018 energy story in Colorado will be Proposition 112, if voters vote to "pass" it. Opponents argue that it will "remove" 58% of future minerals (including oil) from Colorado.

Tesla: great optics. Could surprise. From CNBC:

Shares of Tesla were up more than 12 percent Tuesday afternoon after a noted short seller, Andrew Left of Citron Research, said he's changed his mind and is investing in the company's stock. "Tesla is destroying the competition," Left said in a research note.

Khashoggi: bad optics for MbS. His image is forever tarnished. It's going to be really, really hard (impossible?) for any westerner to have a photo op with MbS. If no westerner is willing to have a photo with MbS does that mean the end of MbS? Very possibly. He's not the only prince in the palace. Being seen with others / saving face is huge in the Mideast. Not sure how MbS can survive.

The Red Queen: Netflix. Link here. Netflix's new $2 billion in borrowing raises Wall Street eyebrows.The streamer's long-term debt has soared north of $10 billion, though Moody's says ratings and outlook remain stable. From the linked article:

Longtime skeptic Michael Pachter of Wedbush Securities says the additional debt did not come as a surprise, considering Netflix's penchant for reporting negative cash flow. "It is precisely what we modeled," says Pachter. "So long as they burn cash, they will have to raise capital to fund their content spending."

Netflix is a victim of its own success. Its original content streamed on demand has proved so popular it has attracted many copycats, so Netflix must spend wildly to keep up with relative upstarts like Amazon, CBS All Access, HBO Now and Hulu.

It also must replenish what it is gradually losing from Warner Bros. and Disney, as each of them prepare to launch their own services next year that will directly compete with Netflix.

This means that if Netflix users want to stream episodes of Friends or the movie Coco, for example, they eventually won't have the option without signing up for yet-to-be named services from Warners and Disney, respectively.

Wow, if this doesn't sound like the Red Queen on her treadmill.

And I would argue that "video content" is entirely different than oil. "Video content" grows stale; loses value over time. Oil tends to never go out of favor; does not grow stale; and tends not to love value over time. So, we'll see. But Netflix? Certainly sounds like the Red Queen on her treadmill.

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Medicare For All

I would consider myself a fiscal conservative. I would like to see the "big numbers." I'm not convinced that the US can't afford "Medicare for all." There would have to be some tweaking but my hunch is that if Trump had time -- he doesn't -- he could get it done.

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ISO New England

Watch in real-time. Look at three things, in this order:

• the five-minute real-time LMP graph and five-minute real-time LMP list
• the $250/MWH spike during the middle of the night
• staying at $50/MWH much of the entire day (as of 1500
• the system load: forecast vs actual
• middle of the night
• 1500 - 2100 (current)
• fuel mix
• renewables at 1900

Later, 1800: yup, here it comes. Spot is now slightly over $81 / MWH. Peaked at $110/MWH in the evening hours.

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What Goes Around, Comes Around

From The Williston Herald:

Northwest District Judge Benjamen Johnson refused to close the courtroom during the testimony of a teenager and his mother in the upcoming trial of Bryton Dahl.

The judge ruled that a victim's concern about "embarrassment" doesn't preclude a defendant's right to a speedy, public, trial, as guaranteed in the Sixth Amendment, US Constitution.

Wow.

Week 8: February 17, 2019 -- February 23, 2019

Top international story: quiet.

Top international energy story: off-shore Brazilian heavy oil could make up shortfall;

Runner-up: Saudi continues to cut production;

Others:

• Canadian National Energy Board recommends the federal government approve the TransMountain pipeline. 
• Alberta will increase CBR;

Top national story: initial unemployment claims drop a stunning 23,000; Dow back to 26,000;

Top national energy story: US crude oil exports hit all-time record; and, here; US hits production record of 12 million bopd;

Runner-up: US CAPEX falling but US crude oil production will continue to climb; and, here;

Geoff Simon's top North Dakota energy stories:

• Quick Take quickly defeated.

The North Dakota House killed a bill that would have required a negotiation process before the state or a political subdivision used quick take eminent domain to acquire private property. The bill received a "do-pass" recommendation from the House Judiciary Committee, but the full House defeated it, 64 - 26. Rep. Denton Zubke, R-Watford City, opposed the bill. Zubke said the measure would add at least 90 days to the condemnation process, which defeats the purpose of quick take. Okay.

• ND Senate passes tribal oil tax bill. 

A new plan for sharing tax revenue from oil produced on the Fort Berthold Reservation passed the Senate this week on a 40-5 vote and is now headed to the House where leaders have already voiced support for the bill. SB 2312 would change the current 50-50 tax split between the state and the Three Affiliated Tribes so that 80 percent of the tax from new wells on trust lands would go to the tribe and 20 percent would go to the state. The shares would be the opposite on fee land, with 80 percent going to the state and 20 percent to the tribe. The primary sponsor of the legislation is Senator Jordan Kannianen, R-Stanley. Wow, nothing subtle about this. 

• ND economy, ranked #2 in the US in 2019:

Not only did North Dakota grab the No. 2 spot for healthiest economy in the U.S. for 2019, the state achieved the single greatest improvement in economic performance of all 50 states over the last 10-year period leaping from the 17th position in 2009 to second in 2019. 

The nationwide study was published by the Ohio Alliance for Innovation in Population Health using information compiled by the Appalachian Regional Commission. The rankings are determined by unemployment rate, per capita market income and poverty rate averaged over three years and compared to national averages.

According to the study, New Hampshire claimed the number one spot for healthiest economy followed by North Dakota. Hawaii was third, Nebraska fourth, and Minnesota was fifth. 

New Hampshire? See story here.

Operations

New non-operating company in North Dakota: Lincoln Energy Partners

A re-fracked XTO well in Lost Bridge reports production; also, here;

The number of active rigs in North Dakota holds steady, increases

Targa Resources sells 45% of its Targa Badlands assets 

CLR has permits for a 12-well pad in Haystack Butte

Bakken economy

Williston brewery to expand

Clearing Out The In-Box For The Archives -- July 3, 2020

Re-posting one of the best job reports ever:

Report: US employers added almost 5 million jobs in June, 2020. That's more job creation than any president in history. Five million jobs added in one month. President Trump able to claim all-time new employment records. LOL. It's amazing how bandanas were the answer. If we had only known.

Jobs report, link here:

• prior: 1.480 million
• revised: 1.482 million (note the fake precision)
• consensus: 1.400 million
• actual: 1.427 million

Market response: Dow surges; up over 400 points in pre-market trading

Bad timing: Rachel Maddow predicted the June jobs report to be "absolutely terrible"; link here: https://www.foxnews.com/media/msnbcs-rachel-maddow-predicted-that-junes-jobs-report-would-be-absolutely-terrible.

Other items of interest for the archives posted below.

Oil, Cushing, glut: near-record oil stockpiles at US Gulf Coast pressure prices of domestic grades. Reuters, July 2, 2020. 

• PADD III, stocks along the Gulf Coast
• WTI at Houston for delivery from next month (August) to June next year (2021) ranged about a $1 premium over US crude futures
• had traded at nearly a $4 premium just two months ago (May, 2020)

Oil, refineries, global: sweeter, lighter, cheaper -- refiners seek oil to meet rising gasoline demand. Reuters, July 2, 2020.

Oil, pipelines, Canada: Canadian Supreme Court removes "last" barrier to TransMountain Pipeline.

Investing: Kiplinger most reliable stocks for retirees updated in July, 2020.

Flashback: Saudi Arabia's PIF and Vision 2030 --

• flawed, Winter 2017, Middle East Quarterly; 
• why Vision 2030 will fail, Middle East Eye, July 20, 2018; 

Pandemic:

• the protests of two to four weeks ago did not contribute to the surge of cases now being reported; link here;  

Farm report:

• USDA crop report shocker sends corn futures surging. Link here.  

Chicago corn futures surged 8% in the last two sessions after a massive reduction to the U.S. government's acreage estimate, reported Reuters. The U.S. Department of Agriculture's crop report on Tuesday showed farmers planted 92 million acres of corn in 1H20, which was a huge miss in expectations and 5 million acres below the USDA's March forecast of 97 million acres. 

This was the largest miss in a March-to-June corn acreage crop report since 1983 resulting in an 8% surge in corn futures trading in Chicago. 

[Comment: we certainly know how accurate government estimates are these days.]

Economy, global, Japan: assets in world's largest pension fund plummet --

The world’s biggest pension fund posted a record loss in the first three months of 2020 after the coronavirus pandemic sparked a global market rout in the period.

Japan’s Government Pension Investment Fund lost 11%, or 17.7 trillion yen ($164.7 billion), in the three months ended March, it said in Tokyo on Friday. The decline in value was the steepest based on comparable data back to April 2008, reducing the fund’s total assets to 150.63 trillion yen. Foreign stocks were the worst performing investment, followed by domestic equities.

True patriot, TDS: more concerned about President Trump than the country. Link here. I doubt Trump is having any nightmares.

Hess To Boost Spending In 2020 -- January 28, 2020

Link here.

• Focus:
• Guyana
• Bakken ramp-up
• Spend:
• 11% more in 2020 compared with 2019
• betting heavily on offshore Guyana and Bakken
• production guidance:
• 2019: 285,000 boepd
• 2020: upwards of 335,000 boepd
• economics:
• drive breakeven price to below $40/bbl Brent by 2025
• Will report 4Q19 earnings on Wednesday, tomorrow, January 29, 2020 

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Meanwhile, In Canada

37% of Canadians oppose the TransMountain oil pipeline. Link here. 

It looks like 37% of Canadians are happy to have their country closed to business.