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I agree that SLB's new Houston core analysis center in Houston is a logical extension of the purchase of TerraTek. There is certainly an intention to become a direct competitor to CLB. How big a dent, if any, SLB can make in CLB's business is the million$(*x) question. I don't know the current state of mind but the words i've heard in the past indicated a great deal of admiration for CLB's management and business. My interpretation is that CLB is seen as the MCD of the core analysis business - they are efficient and they produce a product that the customer is happy with and the customer gets the product quickly. Of course, the customer goes in not expecting to find filet mignon on the menu. SLB sees themselves as being more innovative and better equipped or more willing to address specialized analyses. SLB will also claim that they are far ahead of CLB in understanding the physics of rock deformation and fluid flow in the reservoir and in cores so that their interpretations will be superior (i have no idea if this is true since i only hear one side and i don't do cores). Of course, SLB also serves more generic analytical requests but i don't know (nor could i say) what share of that is for internal purposes versus external clients. Keep in mind that SLB does a decent amount of field management work where SLB may run core analyses for their own benefit. I doubt if CLB has a similar business segment.
hopefully that's enough to be useful but not so much that i get in trouble.
charlie
Obama’s official position on the pipeline just doesn’t wash except as a political ploy to defer discussion until after the election.
the US is very unlikely to achieve energy independence. The writer of the NYT fluff piece uses the phrase "greater energy independence". One thing obama got kind of right yesterday was that the US has a very small percentage of the world's proven reserves. Having Mexico and Canada gets north america closer to 25% of the world's proven reserves and fortunately for the US both countries have relatively small populations (not so we can annex them ;^))
the 2nd half of this sentence is a joke:
How the country made this turnabout is a story of industry-friendly policies started by President Bush and largely continued by President Obama
easy part first
a mammoth undertaking when you consider the # of miles of highway in the US. The initiative will expand with or without government involvement since the economic incentives already exist in the form of cheaper fuel. However, the build out will take decades if only private equity is utilized. I suspect GM's and Dodge's release of nat gas and/or bifuel pick up trucks next year will mark the start of more widespread use of Nat Gas for passenger vehicles. This should spur more private equity interest since the market is huge.
looks like i made a good call. Since i wrote that GE over SLB by 20% and HAL by 45%. total growth over that span isn't so great, but better than the bank.
I'll use this opportunity to address the 8th's RFC on NG. I wouldn't (and cant) invest directly in NG producers and I would not invest in companies like CLNE. While i think NG fueled vehicles will eventually become commonplace in the US how that comes about hasn't even begun to approach becoming settled. One can look at countries like Australia or Pakistan where NG fueling stations are common in the biggest cities but it would be difficult to get from one city to the next on NG (i intentionally juxtaposed developed and undeveloped countries). Australia has substantial NG reserves but most of it is not going to cars in Sydney (nor do i hear Australians clamoring for subsidies to create a vehicle industry to use NG). In addition, large natural gas discoveries like those off of the coasts of Tanzania and Mozambique will be stranded without substantial infrastructure build out for transformation of the NG (e.g. plastics precursors, GTL, LNG, CNG).
In the interim, companies like GE or Air Products will benefit regardless of fuel type and end use.
($2 mcf vs $10 throughout the rest of the world
perhaps you are wrong.
http://kochfamilyfoundations.org/Foundations.asp
you seem to have misunderstood my point yet managed to reinforce it: yeah, volume is what makes money for pipeline owners which is why i said the Koch Bros would benefit as pipeline owners if t-bone's agenda was adopted.
you also seem to have glossed over my earlier objection with your pay back comment. So i will reiterate again: why should tax-payers be hit up to pay for the cost of the infrastructure build out when t-bone, CHK, etc will reap the bulk of the rewards. If t-bone and CHK were to invest (using the word appropriately) in the build out, then there would be no difference in numbers of people put back to work.
Nancy Pillosi is very fond of multipliers. She's fortunate to have married into wealth because her math skills suck.
you'll probably side with the Koch brothewrs on this. As I indicated, I side with TBP and think it is ok for government to front the money knowing that a payback is written into the bill.
I 2nd your comment. Ung is a bad proxy for NG prices
Gary,
it's quite likely that injection is linked to the small earthquakes near the injection sites in Ohio. Various industries have been injecting liquid wastes in Ohio for many decades (it goes back to at least the 1960s). Connection between injection and earthquakes in Ohio is traceable back to at least 1987, c.f. http://bssa.geoscienceworld.org/content/94/1/76.short
If there is a more frequent occurrence of injection related earthquakes, then i wouldn't be surprised if it's related to a higher volume of injectant related to shale gas hydrofracturing. The problem is not necessarily due to the act of injecting but rather attempting to inject too much volume too rapidly. That causes a pressure buildup in the formation and fractures the rock or may reactivate previously existing fractures (aka faults). It's the same phenomenon as hydrofracturing but without the intent or control.
I believe that the general practice is for the gas/oil production companies to farm out the waste disposal to 3rd parties. That is a much lower margin business and i suspect the assessment of the geology and injectivity of the disposal reservoirs receives a lower level of scrutiny than oil and gas bearing formations. I also suspect the disposal companies compete on a volume basis to make up for the lower margins. Unfortunately, Mother Earth doesn't care so much about the business model.
If it makes you feel better, the trend is toward reprocessing and recovering as much of the water as possible for hydrofracturing other wells. That still leaves some garbage but it reduces the earthquake problem.
cheers,
Charlie
as the 2nd link points out near the bottom, thorium fueled reactors have been around for several decades. Towards the end of the cold war and after, these were promoted as a good way to get rid of Pu stockpiles. Between cheaper alternatives and nuclear accidents, reactors which can burn Th never caught on. Some of it was just really bad timing. I don't think the technical barriers are as problematic as the article seems to imply.
Your 3rd link is semi-ancient and seems to focus on REEs and the Mountain Pass deposit which Chevron briefly owned through Unocal (although Chevron did have some interest in Mtn Pass back in the 1980s).
Wilma Subra, chairwoman of Stronger, a nonprofit group made up mostly of state oil-and-gas regulators, said that cracks caused by fracking can extend out of the shale and "allow natural gas and frack fluids to migrate out."
Others say that even if fracking is safe, it doesn't mean drilling poses an acceptable risk. "You may be able to fix one issue, but it doesn't make the whole drilling process OK," said Maya Van Rossum, head of the Delaware Riverkeeper Network and an opponent of gas development in the river's watershed.
Gary,
i have no problem with TB making money; I just don't think he needs a subsidy to do so. The public will benefit regardless of who funds it but handing out such "investments" is slippery slope territory for the gov't.
If he uses tax dollars to start his venture and he succeeds, will he pay back the investment with a risk premium? If he does not succeed, where is the benefit to anyone?
If option 1 is the case, then why hassle with the gov't when he could preserve the gain for himself? I suspect the reason is because he has no intention of returning a risk premium or the principal back to the gov't.
The less tangible benefits to society are not guaranteed to actually manifest.
bringing the xcel pipeline in was quite legitimate. Establishing a national infrastructure for NG fueled ground transport is a huge undertaking and will undoubtedly span many areas like the the Sand Hills. Of course, i think the Sand Hills case is just a smoke screen because there are many "environmentally sensitive" areas already transected by pipelines. I'd bet that there are 100s kms (if not 1000s kms) of oil and gas pipelines already transecting the ogallala aquifer.
look at the players in CLNE. I keep bringing up the bit about natural gas producers and stupid laws for a reason. CLNE is a way for some of those folks to get around that. Now put yourself back in 1957 and ask yourself if you would've thought it reasonable for tax payers to pay for building Texaco stations along the developing interstate system.
wikipedia has an interesting comment by J. D. Rockefeller's father:
"I cheat my boys every chance I get. I want to make ‘em sharp"
i think t-bone and friends have that line memorized and they're playing the part of JD's dad but the kids aren't learning.
regards,
Charlie
ob,
by repeating things i assume you're talking about things like:
http://online.wsj.com/article/SB10001424052702304070104576395662990512484.html?KEYWORDS=Boone-Doggle
if i read that article i'd forgotten about it. My thoughts were my own and as far as i can tell they are factual. If you have documentation to the contrary then it would bolster your assertions to present them.
i suppose you can claim businesses and government are the same entity if you're thinking along the lines that they're all part of society. However, that is overly broad for the purpose. If you omit the anti-semitism angle, Henry Ford was a great facilitator of what might now be called "social justice" and equitable sharing of wealth. However, I see no evidence that he received a dime from the US gov't to found and build any of the automobile companies he founded. He did this at a time when there wasn't an extensive network of fueling stations, pipelines, or paved roads.
I wasn't portraying the folks i mentioned as men who would refuse gov't aid, rather at that time those men were starting their businesses, the US gov't was not inclined to give aid (the US gov't did try to bail out Ford twice prior to WWII; however, it had nothing to do with founding and growing the company). Of course, the US gov't provided the framework in which they could operate and preserve the wealth that they created. I don't consider that a subsidy and it's not like private enterprise does not pay taxes to support national defense and transportation networks.
You extrapolated beyond what I said or intimated. T-bone wants a US gov't subsidized "manhattan project" effort to build out infrastructure for natural gas vehicles. While i think that will happen, such an approach is not necessary or fiscally responsible. He wants it because it will benefit him immensely. It will probably not benefit you. If I was 20 yrs younger and really selfish, I might be much more supportive of t-bone's effort because my salary is partially based on natural gas exploration and production and it would only get better if everyone was sucking down NG like gasoline. As it is, i don't have a car so why should i pay for t-bone to get wealthier. If you want to make the argument that NG benefits society by lowering greenhouse gas emissions and that i should pay because i receive that benefit, well, that benefit is not as clear as some folks claim. The best argument is the "energy independence" angle (which i obliquely address below).
You might want to also consider some other facts: 1. If obama and friends won't allow a pipeline across Nebraska, how will they approve the pipeline infrastructure necessary to accomplish t-bone's vision? 2. if t-bone was really serious about this he would pursuing changing the laws I mentioned in my response to flatlander. A large part of the reason the US became an automobile dependent society is because US oil companies were able to control oil from the reservoir to the fuel pump. In contrast, natural gas producers are effectively forced to sell their product when it comes to the surface. Companies like CHK can provide NG fueled cars and subsidized fuel to their employees but don't you think they would also be setting up NG "gas stations" and promoting NG automobile production if they could control the gas between the wellhead and fuel station? There's a lot less processing involved in turning raw natural gas into auto fuel than crude oil into gasoline so the potential profit margin is much larger. This would happen if the gov't would get out of the way rather than interjecting itself more.
Since there are many municipalities that do have NG fueled bus systems. It would be interesting to see if those systems have realized fuel cost savings and whether their vehicle maintenance & support costs have changed.
regards,
Charlie
"...isn't identifying a need and getting in at the ground floor what investing is all about. "
That's my problem with t-bone, he wants taxpayer funded subsidies rather than risking his money. Investment assumes a risk in exchange for growth on the capital.
The us gov't did not subsidize development of the infrastructure for the auto and gasoline industry other than to build roads and part of the motivation for that was for defense purposes. It was obvious to everyone with a brain that petroleum was more advantageous than whale oil, coal, and horses for transportation in the early 1900s; however, the govt didn't fund Ford, Rockefeller, Carnegie, Schwab...
flatlander,
while your intended meaning is almost certainly different than the literal interpretation, it is not ridiculous for LNG companies and pipeline companies to export natural gas from the US.
1. natural gas prices are much higher in other countries so, of course, companies will chase the highest profit.
2. apparently, there are some ridiculous laws in the US that don't allow natural gas producers to resell their product in the same way that oil producers do. US oil producers can physically control their oil and the refined products from the well head to the gas station. Natural gas companies can't (or so a friend who works for CHK tells me).
guys like t-bone and soros are very good at transferring your tax dollars to their pockets. It does make sense to use natural gas for ground transportation but the infrastructure does not currently exist. t-bone wants you and me to pay for it. In a just and capitalist world, he'd put his money where his mouth is and leave my money out of it until i pull up at the gas station.
Charlie
whether intentional or not it certainly has its inaccurate parts.
fracking,” which uses about 4.5 million gallons of water — about 1,300 tank trucks full — to initially stimulate a well and get it flowing, has raised concerns about the disposal of toxic drilling waste...
a 43-to-16 percent margin that fracking would damage the environment.
nope on your comment about Reagan, c.f.
http://en.wikipedia.org/wiki/United_states_recessions
Reagan takes office Jan 1980
1980 Jan-July peak unemployment 7.8& GDP contraction -2.2%
July1981-Nov1982 peak unemploy 10.8% GDP contraction -2.7%
The "misery index" was very close to its peak when Reagan took office so to say the bottom was years earlier is a gross exaggeration. Lots of folks with recent memory syndrome should take a look at Wikipedia's presidential rankings page and then look at why there are many presidents which score lower than GWB.
http://en.wikipedia.org/wiki/Presidential_rankings
[i don't particularly agree with Grant getting such a bum rap]
edit meant jan 1981 for reagan taking office
ot
You must be very young or don't realize what its like to be handed the baton in the middle of the worst economic downturn in US history. Not sure what you expected Obama to do, but clearly he was the best option we had. I take it you voted for McCain/Palin? That has to be the scariest combination any party has ever tried getting elected.
ot research funding
this little debate started off w/ my comment on a response i hear frequently which can be approximated as "why isn't the gov't funding more research on topic x"? The point was that if topic x has direct linkages to making money, then gov't should not be the primary funder for research in that field. That is not an attack on university research programs nor did i frivolously insert the word primary. Companies will and do fund research in order to make money. Aspects of that research are frequently no less 'basic' or 'fundamental' than much of the research done in universities and national labs and it is no less socially beneficial. I've reviewed dozens of university research proposals and nearly all of them claim some link to practical economically related applications. That doesn't make those proposals non-basic, non-fundamental, or disqualify them from federal funding. However, as a taxpayer, why would you volunteer to fund that research if private companies were willing. Of course, given the opportunity to be leaches, corporations will take advantage. Bell Labs is no more. read into that what you will.
I did not make any statements along the lines of gov't should not fund scientific research. I did not say "clinical development has nothing to do with science". I did not say anything about political parties.
Thank you for pointing out that MIT's royalty stream on patents is >10%/yr. I think anybody on this board would be exceedingly happy with that rate of return (it's actually much greater than 10% but the $25M disappeared in your representation). It is a useful document.
i am done with this topic so nobody should be feel compelled to call for a stop on my part.
ot research funding
it would not surprise me if there were statistics to the contrary because these are gov't numbers and its interest is to be the low number but if you piece the numbers from these together they appear to validate my statement regarding the pharmaceutical industry and also make it clear that industry, overall, spends more on R&D than the US gov't.
http://www.cbo.gov/ftpdocs/76xx/doc7615/10-02-DrugR-D.pdf
http://en.wikipedia.org/wiki/Research_and_development
http://www.cbo.gov/doc.cfm?index=8221&type=0&sequence=2
of course, the Development part of R&D frequently eats up a huge part of R&D budgets and Development generally has very little to do with science.
where do you think that the funding to build and operate MIT comes from
ot
vinmantoo,
in referene to:
I suggest you don't know any basic researcher or know anything about basic research.
ot
OB, wasn't intended to be a left vs right comment and i didn't mention any particular political party.
my 1st point was 1. intended as a pun and 2. most materials science research does have a very direct industrial linkage and therefore should not require heavy gov't support. The citizens can and do benefit if industry supports the work. I've worked with a lot materials scientists and even those in academia were heavily supported by industry. My employer is a large financial supporter of materials science research at MIT amongst other universities.
Some folks seem to have an automatic response that gov't is the preferred provider of scientific research and funding for research. That's obviously not true in pharmaceutical development so why should it be in materials science?
The Solyndra comment was merely a reminder that the US gov't was supporting an already obsolete technology which supports my argument that the US gov't is not always the best place to bet your scientific research dollars.
I have always thought that a great payoff for our investment dollars would be if the US government ratcheted up money for material science research.
If you're referring to the MVRBF shares, then there's an extra digit but i'll take a 5% jump.
the impressive thing is the jump in volume. I was beginning to think i was the only person buying since Sept ;^)
edit. my bad i see you explicitly referred to Stockholm
http://opsweb.phmsa.dot.gov/pipelineforum/docs/Role_of_Energy_Pipelines_and_Research_FINAL.pdf
pg 18 shows a schematic of crude and refined product pipelines (separately)
http://www.pipeline101.com/reports/Notes.pdf
pg 8 similar but color coded by source
note that most of the stuff from ND and western Canada is headed for Chicago area, WY, CO, Utah (and eventually CA), and southern Illinois/Indiana rather than Cushing.
slide 11 more narrowly browken down to upper plains, rocky mtn area
http://www.nd.gov/ndic/ogrp/info/g-010-019finter.pdf
specific to ND
https://www.dmr.nd.gov/pipeline/assets/maps/ND%20Crude%20Oil%20Map.pdf
https://www.dmr.nd.gov/pipeline/assets/maps/ND%20Products%20Map.pdf
i managed to lose the map that showed the discount to destination relative to WTI from western ND but whenever the map was made (I'm going from memory) it was ~ -$3.5 for Billings or Casper; ~ -$2 for MN/Chicago ; 0 to Cushing; and ~+$3 for St Charles. Obviously prices are now different but the general scheme is the same. I believe the oil is paid for at the refinery and all of this is part of the reason for not investing in refiners (as an oil company or an individual)
if the oil goes thru Cushing, then i would think the price would be settled there. Most of the oil from the Bakken AND Alberta/Saskatchawan does not go thru Cushing. If you read the WSJ article you'll see reference to a small town in Minnesota. There's also another hub in a small 'cow' town in Wyoming (that's a pun that the truly enlightened will understand). There are also 2 refineries near Denver that some of the oil goes directly to. Shall I go on?
The 2nd sentence of your 2nd paragraph is what I said in my original reply to Dew.
http://freedomslighthouse.net/2012-presidential-election-electoral-vote-map/
iowa, wisconsin, colorado according to these folks. I'd include MN and I wouldn't assume Michigan is a gimme.
Intent to depress gasoline prices in some northern states
i think the answer is yes and i'll answer the 2nd part anyway 8^): i suspect the market in the north is glutted. Producers in the Bakken and Canada are competing with each other to move oil. Even if refineries relatively close to the Bakken are operating well under capacity (this can be checked but i'm lazy), i wouldn't be surprised if they're refusing delivery unless they get very favorable terms. The keystone pipeline was planned for a reason. I suspect its blocking is partially intended to accomplish what is going on but like so many things about this administration: it's a short term tactic that will have terrible strategic consequences.
bakken pricing
a friend in a hedge fund recently told me that at least one large bakken producer has wrapped up a contract with a railroad to move something like 50k bbl/day to Texas. (I'm going by memory so my feelings won't get hurt if somebody questions the magnitude).
at a delta of $25/bbl alternatives will be found.
is it not likely that a judgement of infringement against Amph will simply result in them shutting their doors in the US and operating in the PRC? As far as I can tell, aside from the low tier A* employees, there are only 2 people at A* that have much to lose and I suspect moving back to the PRC wouldn't be a huge inconvenience for those 2 people.
argentina is very hot exploration territory these days.
yeah, that goes with the revenue mix. i still don't think the CT imaging stuff is nanometer capable but somewhere along the line nanometer became way more sexy than microns and millimeters. It's one of my peeves.
i don't think CLB (or any service company) is avoiding the gas shale folks but rather the other way round. I suspect that there will have to be massive consolidation amongst natural gas producers before prices improve dramatically (that being by multiples rather than a few 10s of percent) so that services are useful and affordable. At the moment there is a crazy situation where companies are producing into a glutted market just because they have to maintain lease holdings and revenue streams. Natural gas is still a local market which is exemplified by the 2x to 5x difference in prices between NAM, Europe, and Asia. I suspect for many NAM natural gas producers it is a matter of prolonging death. Then there are some other companies who seem to be using the JD Rockefeller playbook.
i wouldn't get too enthusiastic about the shale related comments. Maybe i'm overly cynical but the comments look a bit shady. They mention shale first without a modifier so average Joe thinks shale gas because that gets all the press play. It's only later they specify 'oil shale'. Liquids producers can afford these kinds of analyses but most shale gas producers either can't afford them or do them inside their own operations (e.g. CHK). In addition, i think the spatial resolution on CT is a bit bigger than what your quoted section implies (i.e. CT can't do nanometer scale unless the number has a few digits in front of the decimal).
I'm not sure who the pressure pumper is that you asked about in your follow-up post. if it refers to north america it's probably HAL or BHI. Something close to 99% of oil wells in NAM use pressure pumping and HAL is the biggest service company in NAM (which is non-standard geography because oil biz NAM doesn't include mexico).
sorry for flying off the handle then.
i'll stand by my statement which in quite clear English says nothing about the history of wine or wine which you contend has become animated.
http://en.wikipedia.org/wiki/List_of_wine_producing_countries (Georgia #34 and far behind those wine producing powerhouses of Brazil and Serbia) However, this list is in metric tonnes.
if you go to: http://faostat.fao.org/site/535/DesktopDefault.aspx?PageID=535#ancor
you can list out the xport value by country. Georgia exported about $32M of wine in 2009. Apparently, Brazilian wine is cheap because they only exported $10M in 2009. Those Danes must produce the really good stuff (dripping with sarcasm in case you havent noticed) because they exported $115M of wine in 2009. Of course, the French exported $7.7B but who was talking about economic significance.
in addition, just because Russia gets into the WTO doesn't mean they'll start consuming a lot of Georgian wine. Georgia's per capita consumption is higher than Russia's and if you do the math you'll see that they consume about 6x more than they produce.
http://www.wineinstitute.org/resources/worldstatistics/article44
who has to know much when you can just look it up? Of course, the difference is I do before I suggest people don't know what they're talking about. Back to you jim.
you can't seriously expect wine sales from Georgia to be economically significant?
also, what's with the ....?