Masters Of War

Come you masters of war You that build all the guns You that build the death planes You that build all the bombs You that hide behind walls You that hide behind desks I just want you to know I can see through your masks. You that never done nothin' But build to destroy You play with my world Like it's your little toy You put a gun in my hand And you hide from my eyes And you turn and run farther When the fast bullets fly. Like Judas of old You lie and deceive A world war can be won You want me to believe But I see through your eyes And I see through your brain Like I see through the water That runs down my drain. You fasten all the triggers For the others to fire Then you set back and watch When the death count gets higher You hide in your mansion' As young people's blood Flows out of their bodies And is buried in the mud. You've thrown the worst fear That can ever be hurled Fear to bring children Into the world For threatening my baby Unborn and unnamed You ain't worth the blood That runs in your veins. How much do I know To talk out of turn You might say that I'm young You might say I'm unlearned But there's one thing I know Though I'm younger than you That even Jesus would never Forgive what you do. Let me ask you one question Is your money that good Will it buy you forgiveness Do you think that it could I think you will find When your death takes its toll All the money you made Will never buy back your soul. And I hope that you die And your death'll come soon I will follow your casket In the pale afternoon And I'll watch while you're lowered Down to your deathbed And I'll stand over your grave 'Til I'm sure that you're dead.------- Bob Dylan 1963

Sunday, November 8, 2015

TPP text released, Keystone XL terminated, the latest EIA oil stats, and global rig counts

a couple big stories broke late this past week...first, on Thursday, the text of the Trans Pacific Partnership was released and Obama announced that he intended to sign it, starting the ninety-day period during which the public and Congress get to look it over before he actually does sign it, at which time Congress gets another 90 days to approve it by a yes or no simple majority, with no possibility of amendments or filibustering since Congress granted Obama trade promotion authority...then, just before noon on Friday, the administration announced that they had rejected the application from TransCanada to build the keystone pipeline, finally ending the 7 years of debate the nation has had about that pipeline ...
since the TPP is 1500 pages and all i've read is the preface, i cant comment on what's actually in it first hand, but i can tell you that almost everyone who has cracked open a chapter underlying their personal interest in it has commented that it's worse than they imagined...in fact, if we simply google "TPP worse", we find dozens of new headlines from those who want to relate that TPP is worse than they thought it would be...the only piece i've seen that's close to a full analysis on such short notice came in the form of a 17 page pdf from Public Citizen, who has made it their cause to monitor all the trade agreements that our country has been signing...as far as we're concerned, there's not much new that we hadn't discussed previously (ie, here and here); the signatory nations will have a right to as much of our gas and oil as our corporations can supply, and hence our prices for the same will rise to the international level, which will unleash a new round of drilling and environmental degradation...furthermore, the oil companies can meet any attempt by state or local governments to curtail fracking or other polluting activities with a lawsuit to recover loss of potential profits, which would be adjudicated not by our own courts, but by a supra-national court set up under the World Trade Organization's Investor Dispute Settlement Body....
the Keystone story had several interesting turns earlier in the week...on Monday, we learned that TransCanada had asked the Administration to suspend it's Keystone application, citing multiple lawsuits and difficulties in getting approval from state authorities for a route through Nebraska....that brought out the expected applause and claims of vindication from the environmental websites opposing the pipeline, but the request by TransCanada turned out to be just a ploy to get the process delayed until such time as a Republican could be elected president...the administration saw through that, of course, and denied the TransCanada request for a Keystone delay, with Obama affirming that he wanted to take action on the pipeline himself before his time in office ended...whether that TransCanada request precipitated the action later in the week is unknown, but the late Friday announcement, made after the congressional supporters of Keystone had left Washington for a week in the districts, was a politically opportune time for such an announcement nonetheless...predictably, the response from Calgary-based Suncor Energy, Canada’s largest oil producer, was that without Keystone, they would just have to ship more tar sands crude by rail...
nonetheless, we shouldn't pretend that stopping this pipeline is somehow stopping tar sands crude from reaching the US...recall that a combination of Enbridge pipelines including the Alberta Clipper and Flanagan South started pumping tar sands crude clear to the Gulf of Mexico late last year, and within a month they had an approval for another 800,000 barrels per day pipeline to move tar sands crude from Flanagan Illinois east....Enbridge already has such an extensive US pipeline system in place that they're now planning to ship tar sands crude to two refineries in Quebec by pumping it first to Flanagan Illinois, then on through Michigan and Ontario to meet a Montreal pipeline which they're now reversing...furthermore, as we discussed earlier this year, eventual expansion of the Seaway pipeline system to Houston would double its capacity to 850,000 barrels per day when completed, even more than the expected 830,000 bpd capacity the Keystone XL would have had...and even without the Keystone, Canadian oil exports to the US have increased from 95.6 million barrels in August of 2013 to 121.5 million barrels in August of this year...so while Keystone at 830,000 barrels per day would have carried about 25 million barrels of oil per month, without it our imports from Canada increased by 26 million barrels per month over the past two years anyway...
This Week’s Oil Data from the EIA
this week's data from the Energy Information Administration indicated a small decrease in our crude oil imports, an even smaller increase in our production of crude, a similar small increase in the use of that crude by refineries, and hence a smaller increase in the amount of surplus oil that had to be stored....for the week ending October 31, our field production of crude oil rose to 9,160,000 barrels per day, an increase of 48,000 barrels per day from the production of 9,112,000 barrels per day during the prior week, and still 2.1% greater than our production of 8,972,000 barrels per day during the week ending October 31st last year; that was also our highest output of crude since the last week of August, but still about 4.7% below the modern weekly record production of 9,610,000 barrels per day that was set in the first week of June this year...meanwhile, our imports of crude oil fell to 6,943,000 barrels per day during the week ending October 31st, an 89,000 barrels per day decrease from the 7,032,000 barrels per day we imported during the week ending October 23rd, but still 4.0% more than the 6,675,000 barrels per day we imported during the same week last year...however, checking the 4 week average of imports in the weekly Petroleum Status Report (62 pp pdf), we find that U.S. crude oil imports averaged 7.2 million barrels per day over the last 4 weeks, 0.8% below our imports in the same 4 weeks of last year...
meanwhile, crude oil used by US refineries averaged 15,637,000 barrels per day during the week ending October 30th, 21,000 barrels per day more than the week before, as our refineries operated at 88.7% of capacity during the week, up from 87.6% of their operable capacity during the week ending October 23, 2015, and just up a bit from the 88.4% of capacity they used during the week ending October 31st last year....gasoline production fell to an average of 9,537,000 barrels per day, while distillate fuel production was up a bit, averaging 4.9 million barrels per day....and while our ending gasoline inventories fell for the 4th week in a row, at 215,347,000 barrels those supplies still remain above the upper limit of the average range for this time of year...the greater usage of oil by refineries combined with a lower supply led to another drop in the oil left over that had to be stored, but we still added nearly 2.85 million barrels to our inventories during the week, lifting our stocks of crude oil in storage, not counting the government's Strategic Petroleum Reserve, to 482,810,000 barrels as of October 30th...we've now added roughly 28.8 million surplus barrels of oil to storage over the past 6 weeks, and we now have 27.0% more oil in storage than we had on October 31st a year ago, leaving us the most oil we ever had stored anytime in October in the 80 years of EIA record keeping, which had never seen more than 400 million barrels stored before this year...
Latest US & Global Rig Counts
the number of rigs drilling for oil in the US fell for the 10th week in a row, while the number of rigs drilling for gas rose for the 4th consecutive week...Baker Hughes reportedthat their count of active oil rigs fell by 6 to 572 in the week ending November 6th, while their count of active gas rigs rose by 2 to 199; those counts are down from the 1568 rigs, 356 gas rigs, and 1 miscellaneous rig that were active on November 7th of 2014....rig changes this week include a rig added on an inland lake, bringing the inland waters rig total up to 5, but still down from 13 a year ago, and one rig removed from offshore California, where none remain...we now have 32 offshore rigs still drilling, all in the Gulf of Mexico off Louisiana, which is down from 51 Gulf rigs and a total of 53 offshore rigs that were working the same week last year...
unlike last week, when 14 horizontal rigs were shut down, a net of 8 horizontal rigs were added this week, bringing the total of working horizontal rigs back up to 585, which is still well less than half of the 1362 horizontal rigs that were working a year ago...on the other hand, this week's vertical rig count fell by 7 to 105, well down from the 360 vertical rigs that were in use a year ago....the week also saw 5 directional rigs stacked, leaving 81, which is down from the 203 directional rigs that were in use the first week of November last year...
of the major shale basins, the Permian of west Texas saw an increase of 3 rigs, and they're now up to 232, which is still down from 567 last year at this time...2 rigs were added in Oklahoma's Arkoma Woodford, which now has 10, up from 6 a year ago, and which is the only major basin to show a year over year increase...single rigs were also added in the Mississippian lime of the Kansas Oklahoma border, and the Williston of North Dakota; the former now has 13, down from 76 a year ago, while the later is back up to 63, but down from 193 a year ago...meanwhile, the Cana Woodford of Oklahoma was down 4 rigs to 32, which is down from 39 a year earlier, while the Eagle Ford of south Texas was down 3 rigs to 72, 140 less than the 212 rigs working that area a year earlier...in addition, the Barnett shale, underlying the Dallas-Ft Worth area, was down a rig to 5, which was down from 23 a year ago...
the state count shows New Mexico the big winner this week, as they were down 5 rigs to 37, leaving them 57 fewer than the 96 they had working last November 7th...California and Wyoming both shed 2 rigs; California now has 12, down from last year's 46, while Wyoming has 24, down from last year's 61...in addition, Oklahoma was down 1 to 83, which was down from 208 a year earlier...states adding rigs included Colorado, where they' were up 3 to 33, but still down from 75 last year, Kansas, where they now have 10, still down from 28 a year earlier, Texas, where their 340 count is down from 906 a year earlier, North Dakota, where their count of 63 is down from last years 181, and Illinois, where they now have 4 active rigs including at least 1 drilling a shallow horizontal well, up from just 1 rig a year ago...
this week also saw the monthly release of the global rig count for October, which unlike the weekly count, is an average of the number of rigs running in each country for the month, rather than the month end total...October saw an average of 2,086 rigs drilling for oil and natural gas around the globe, which was down from 2,171 in September and down from 3,657 rigs that were in use in October of last year...the lions share of the reduction was in the US, which saw 57 fewer rigs in October, and saw the total rig count average drop from 1925 last October to 971 with this report...in addition, although Canada saw 184 rigs in October, up 1 from a month earlier, their count was down from 424 a year earlier...
the Middle East region saw an increase of 7 rigs for the month, as their count rose from 396 in September to 403 in October, with 54 of those offshore in the Gulf region, up from 47 offshore in September and 44 offshore a year ago, and their total active rig count is now up 13 from the 390 that we in use in the region a year ago....Abu Dhabi in the United Arab Emirates accounted for this month's increase, as they added 8 to the 40 rigs they had working in September, which was up from 35 a year ago...Egypt also added 2 rigs; they now have 40, which is still down from the 53 they were working last October...meanwhile the Kuwaitis idled 3 rigs, leaving them with 40 drilling, down from the 41 they were running in October of 2014...and the Pakistanis averaged 23 active rigs in October, down from 27 in September, but up from 19 a year earlier...meanwhile the Saudi rig count was unchanged at 125 in October, which was up from 108 a year earlier....note that Iran, Russia, and China are not included in Baker Hughes international data, although China offshore, with 28 rigs, is...
the Latin American countries saw a reduction of 27 rigs in October as the region averaged 294 rigs for the month, including 55 offshore; that was down from 393 a year ago, which included 84 offshore rigs at that time...Latin American countries idling rigs in October included Argentina, where they were down 5 to 105, but still up from 101 a year earlier, Brazil, where they were down 4 to 36, which was down from 46 a year earlier, Colombia, where they were down 6 to 20, and down from 44 a year ago, Ecuador, where they were down 5 to 6, which was down from 25 a year earlier, and Venezuela, where they were down 4 to 71, which was down from 73 last October...
elsewhere, the Asia-Pacific region had 213 drilling rigs working in October, 5 fewer than in September and down from 252 last October...the only notable change in the region was in India, where they reduced their 114 rigs to 110, which was down from 121 a year ago...the total count of rigs drilling in Africa fell by 3 to 93, which was down from the 125 rigs that were working on the continent in October a year earlier...Algeria was down 2 to 51 but up from 45 a year earlier, Gabon was down 2 to 2, down from 5 a year earlier, and Morocco saw their only 2 rigs shut down…meanwhile, the rig count in Angola rose from 7 to 12, which was still down from 14 a year ago...lastly, the rig count in Europe was down 1 to 108, and down from 148 a year ago, as Norway and Denmark both stacked two rigs, leaving Norway with 15, down from last year's 16, and Denmark with 2, down from 3 a year ago....and while the German rig count jumped from 1 to 3, it was still down from 4 a year earlier...

(NB: 100 related links from last week here…)

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