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Oil Boomtown Williston, N.D., Looks for a Stable Future

This oil boomtown, known for its brawling roughnecks and their spare living conditions, is starting to smooth off its rough edges. But not all of them. Muddy pickup trucks still jam the streets, but they drive past recent additions to town, including more than a dozen new restaurants like . Subdivisions are springing up along the hills and a $73 million recreation center opened last weekend. Williston is working to transform itself into a stable community built for a long future, but remnants of the scrappy oil town remain. Thousands of workers still crowd into so-called man camps. Seedy taverns dot the map. "It’s a boomtown—that’s a fact of life," said Mayor Ward Koeser, "but I believe this […]

Posted On : Published By : Tom Whipple
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Does Tesla Really Need a $5 Billion Battery?

In a project that is befuddling industry experts and competitors, Tesla Motors Inc. is looking for possible sites for a giant electric-car battery factory in four Southwestern states. The plant, dubbed a "gigafactory" by Tesla Chief Executive Elon Musk , would be the world’s largest factory by a long shot. Mr. Musk has outlined a proposal to spend $5 billion on it, hiring up to 6,500 workers and creating thousands of ancillary jobs. He compares the undertaking to auto-industry pioneer Henry Ford’s early 20th century Rouge complex. It took in iron ore and other raw materials at one end and rolled out completed Model Ts at the other, aiming to control and cut costs at every stage of production. Mr. Musk wants to begin making batteries at the plant in 2017, a timeline that puts pressure on the company to break ground this year. Tesla executives say they need […]

Posted On : Published By : Tom Whipple
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California Drought Persists, Snowpack Shows

Recent wet weather has failed to break California’s worst drought in decades, according to measurements showing the state’s snowpack stands at about one-third of its normal average. That could result in higher prices nationally for some produce grown in the state, such as nuts, according to food-industry experts. California has seen more precipitation since February, and in recent days storms have blanketed the state’s mountains in several feet of snow. Still, Tuesday’s surveys by the Department of Water Resources showed the there at 32% of normal. While that is a big jump from a reading of 12% at the end of January, state officials say that with the wet season about to wind down, it isn’t enough to end a drought that has prompted mandatory rationing and water cutbacks to farms and cities. "We can hope that conditions improve, but time is running out and conservation is the only […]

Posted On : Published By : Tom Whipple
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Magellan Midstream to build condensate splitter

Pipeline operator Magellan Midstream Partners LP , Tulsa, reported it will spend $250 million to build a 50,000 b/d capacity condensate splitter and other facilities at its Corpus Christi, Tex., terminal, which serves the Eagle Ford shale. The splitter construction is supported by a long-term commitment from Trafigura AG. Magellan said it could construct an additional 50,000-b/d capacity splitter at the site if demand grows. The Magellan project will include 1 million bbl of storage, dock improvements, and two additional truck-rack bays and pipeline connectivity between Magellan’s terminal and Trafigura’s nearby facility. The splitter is slated for operation in second-half 2016, Magellan said.

Posted On : Published By : Tom Whipple
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Does_EIA_Drilling_Productivity_Report_Reflect_Real_World

Last October, the Energy Information Administration (EIA) announced it would introduce a new publication that focused on the impact of drilling rig productivity on oil and gas output. This report was developed to assist the EIA in its forecasting of future oil production given that the American shale revolution has altered the historic relationship between active drilling rigs and oil and gas production. Drilling horizontal and hydraulically fracturing shale wells has changed the forecasting landscape. What the EIA concluded was that it could identify the additional barrels of crude oil and thousand cubic feet of natural gas that came from the addition of one average working rig in a basin. It also concluded that measuring this addition would enable the agency to forecast output two months into the […]

Posted On : Published By : Tom Whipple
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UK’s biggest coal miner on verge of collapse

UK Coal is appealing for government support to stave off a collapse that would cost 2,000 jobs. The largest coal miner in Britain was rescued last year by the Pension Protection Fund , which preserves the pensions of employees whose companies go bust. But it is on the brink of insolvency again. Hargreaves Services , the only other domestic large scale miner , is also in talks to invest in the business, according to people familiar with the situation. Its proposal to buy UK Coal for £20m was rejected by administrators last year in favour of the PPF rescue. Hargreaves could not be reached for comment. In case that bid fails, UK Coal is asking for £10m of government funding to close two of the past three deep pits in Britain and sell off its surface mines. The business, which is burning cash reserves because of the low […]

Posted On : Published By : Tom Whipple
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Tech Talk – of Wheat and Coal

The release of the latest assessment of the IPCC on the future of the planet, failing their push to cut greenhouse gas emissions, has brought forth headlines and supportive editorials in papers around the world. Yet I could not help but note a couple of things that form the basis for this tech talk. The first was that the report discussed the impacts of climate change (for which I suspect in this case they mean global warming) on agricultural production. They stress the negative impacts on crops such as wheat, and so, being curious, I went to the Wikipedia page that provides a table of wheat production over the past eighteen years, and plotted the data. Figure 1. Global wheat production in millions of metric tons (after the Food and Agricultural Organization via Wikipedia ) Clearly wheat production is growing rather than, as the IPCC report implies, declining with […]

Posted On : Published By : Tom Whipple
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Oil Futures Range-Bound Before U.S. Inventory Data

Crude-oil futures traded in a narrow price range in Asian hours Tuesday as investors digested China’s manufacturing numbers, and ahead of weekly U.S. oil-inventory reports. On the New York Mercantile Exchange, light, sweet crude futures for delivery in May traded at $101.42 a barrel at 0621 GMT, down $0.16 in the Globex electronic session. May Brent crude on London’s ICE Futures exchange fell $0.13 to $107.63 a barrel. China’s official manufacturing Purchasing Managers Index rose to 50.3 in March from 50.2 in February. HSBC’s China manufacturing PMI fell to 48.0 in March from 48.5 in February. The HSBC data is more representative of small businesses while the official PMI better captures large, state-owned enterprises. "That last month’s rise was the smallest March increase on record suggests that both PMIs remain downbeat," economist Julian Evans-Pritchard at Capital Economics wrote in a note. The manufacturing data suggests that […]

Posted On : Published By : Tom Whipple
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WTI Drops for Second Day on China Economy Concern; Brent Steady

West Texas Intermediate fell for a second day amid concern China ’s economic growth is slowing and estimates that U.S. crude supplies expanded for an 11th week. Brent was steady in London . Futures dropped as much as 0.6 percent in New York after losing 1 percent in March, the most in four months. China’s manufacturing indexes released today pointed to a slowdown in the world’s second-largest oil consumer. U.S. crude stockpiles probably rose by 2.5 million barrels last week to the highest level since November, according to a Bloomberg News survey before government data tomorrow. “Oil demand growth has been dragged down by weakness in China, where the authorities are trying desperately to balance controlling pollution and credit bubbles with maintaining steady economic growth,” Amrita Sen, chief oil market strategist at Energy Aspects Ltd., a consulting company in London, said in a report. “Crude demand has reached its […]

Posted On : Published By : Tom Whipple
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Egypt: Smartcard Plan to Attack Egypt's Fuel Crisis

; Fuel subsidies in Egypt account for 22 percent of the state’s annual budget, taking funds away from other sectors like health and education. The government believes an ambitious five-year scheme, starting with a fuel smartcard roll-out, will reduce and rationalize fuel consumption, circumvent widespread corruption and phase out fuel subsidies. Estimates for fuel subsidies for this year amount to the equivalent of US$20.1 billion. "We pay for fuel subsidies about seven times more than what we spend on health and three times more than on education," said Haithem Trabeek, a senior strategic and business planning manager with E-Finance, a company owned by the Ministry of Finance and selected by the government to run a new smartcard system that is part of a plan to reform fuel subsidy payments. The cards are initially being used to monitor the distribution of subsidised fuel to help identify fraud and corruption […]

Posted On : Published By : Tom Whipple