Sunday, September 21, 2014

NASA Photo of the Day

From Tuesday:

Milky Way above Atacama Salt Lagoon
Image Credit & Copyright: Alex Tudorica (AIfA, U. Bonn)
Explanation: Galaxies, stars, and a serene reflecting pool combine to create this memorable land and skyscape. The featured panorama is a 12-image mosaic taken last month from the Salar de Atacama salt flat in northern Chile. The calm water is Laguna Cejar, a salty lagoon featuring a large central sinkhole. On the image left, the astrophotographer's fiancee is seen capturing the same photogenic scene. The night sky is lit up with countless stars, the Large and Small Magellanic Cloud galaxies on the left, and the band of our Milky Way galaxy running diagonally up the right. The Milky Way may appear to be causing havoc at the horizon, but those are just the normal lights of a nearby town.

A Slight Understatement

From a Wall Street Journal story on U.S. Steel's CEO, and his plan to overhaul the steelmaking giant:
U.S. Steel's share price has more than doubled since Mr. Longhi took over, largely because investors are excited about his cost-cutting initiative, dubbed "the Carnegie Way," after notable steelmaker Andrew Carnegie. The company is cutting $435 million in costs this year and said it can make similar cuts in the next several years.
Notable steelmaker?  You could say that:
Carnegie made his fortune in the steel industry, controlling the most extensive integrated iron and steel operations ever owned by an individual in the United States. One of his two great innovations was in the cheap and efficient mass production of steel by adopting and adapting the Bessemer process for steel making. Sir Henry Bessemer had invented the furnace which allowed the high carbon content of pig iron to be burnt away in a controlled and rapid way. The steel price dropped as a direct result, and Bessemer steel was rapidly adopted for railway lines and girders for buildings and bridges. The second was in his vertical integration of all suppliers of raw materials. In the late 1880s, Carnegie Steel was the largest manufacturer of pig iron, steel rails, and coke in the world, with a capacity to produce approximately 2,000 tons of pig metal per day. In 1888, Carnegie bought the rival Homestead Steel Works, which included an extensive plant served by tributary coal and iron fields, a 425-mile (685 km) long railway, and a line of lake steamships. Carnegie combined his assets and those of his associates in 1892 with the launching of the Carnegie Steel Company.
By 1889, the U.S. output of steel exceeded that of the UK, and Carnegie owned a large part of it. Carnegie's empire grew to include the J. Edgar Thomson Steel Works, (named for John Edgar Thomson, Carnegie's former boss and president of the Pennsylvania Railroad), Pittsburgh Bessemer Steel Works, the Lucy Furnaces, the Union Iron Mills, the Union Mill (Wilson, Walker & County), the Keystone Bridge Works, the Hartman Steel Works, the Frick Coke Company, and the Scotia ore mines. Carnegie, through Keystone, supplied the steel for and owned shares in the landmark Eads Bridge project across the Mississippi River at St. Louis, Missouri (completed 1874). This project was an important proof-of-concept for steel technology, which marked the opening of a new steel market.
In 1901, Carnegie was 66 years of age and considering retirement. He reformed his enterprises into conventional joint stock corporations as preparation to this end. John Pierpont Morgan was a banker and perhaps America's most important financial deal maker. He had observed how efficiently Carnegie produced profit. He envisioned an integrated steel industry that would cut costs, lower prices to consumers, produce in greater quantities and raise wages to workers. To this end, he needed to buy out Carnegie and several other major producers and integrate them into one company, thereby eliminating duplication and waste. He concluded negotiations on March 2, 1901, and formed the United States Steel Corporation. It was the first corporation in the world with a market capitalization over $1 billion.
Maybe the Wall Street Journal wasn't impressed that Carnegie gave so much of his wealth away.  Anyway, it is notable that the man who created the U.S. Steel empire is described as "notable" in a story on the same company over a hundred years after Carnegie sold it.

It's A Start

The Cincinnati Bengals have started the season 3-0, and are undefeated in September for the first time in seven seasons.  That year they finished 8-8.  Hopefully  this season will go a little better.

I think we could use some music.

Canary in the Fracking Play?

A couple Fridays ago, the July production data for the Bakken field in North Dakota were released:
June Oil 32,775,559 barrels = 1,092,519 barrels/day
July Oil 34,429,910 barrels = 1,110,642 barrels/day (preliminary)(NEW all-time high)
1,047,034 barrels per day or 94% from Bakken and Three Forks
63,608 barrels per day or 6% from legacy conventional pools
June Gas 37,588,622 MCF = 1,252,954 MCF/day
July Gas 40,035,470 MCF = 1,291,467 MCF/day (preliminary)(NEW all-time high)

June Producing Wells = 11,090
July Producing Wells = 11,287 (preliminary)(NEW all-time high)
7,862 Wells or 70% are now unconventional Bakken –Three forks wells
3,425 wells or 30% produce from legacy conventional pools
Hey, a new record high.  That's good news.  But compare it to the June data:

May Oil 32,254,545 barrels = 1,040,469 barrels/day
June Oil 32,778,524 barrels = 1,092,617 barrels/day (preliminary)(NEW all-time high)
1,048,462 barrels per day or 96% from Bakken and Three Forks
44,155 barrels per day or 4% from legacy conventional pools

May Gas 36,978,663 MCF = 1,192,860 MCF/day
June Gas 37,594,631 MCF = 1,253,154 MCF/day (preliminary)(NEW all-time high)

May Producing Wells = 10,902
June Producing Wells = 11,079 (preliminary)(NEW all-time high)
7,704 Wells or 70% are now unconventional Bakken –Three forks wells
3,375 wells or 30% produce from legacy conventional pools
So, 158 new wells came on-line, but overall production from the Bakken-Three Forks wells actually decreased by over 1,400 barrels a day.  There are a lot of potential explanations for the decrease, including bad weather, inaccurate data (they are preliminary numbers), onetime factors or other background that I can't think of.  Also, this is just one month of data. 

However, there are also a few potential factors which lend credence to doubts of more optimistic views of the "shale oil revolution."  We are getting 3 years on from when well startups really took off in the Bakken play, so those wells are probably reaching the end of their significant production lives.  July, 2011 saw 198 new wells come online, and total production increased from 384,809 barrels a day to 423,550 barrels a day.  That was a 38,741 barrel per day, or 10 percent increase.  Going forward, it may take almost 150 wells per month just to replace the decline in production from 3 years worth of existing wells.  That will make the monthly increases in production harder to come by.  Likewise, you are more likely to see more dry holes and more low-production wells as we move away from the sweet spots in the field. 

Next month's data release may show July to be a one-off decrease in production, but the warning is still there.  Several folks are predicting a peak in production within 2 or 3 years in the Bakken.  The Eagle Ford and the Permian basins will see peaks eventually, too.  So it is very likely that soaring oil prices and supply issues will be seen in our intermediate future.  That will strain what is already a shitty economic expansion and put a greater strain on already suffering middle-class households.  That will be bad. 

Saturday, September 20, 2014

End of Summer Weekend Reads

Some interesting stories for the weekend:

This Is Katie F---ing Ledecky: A Thesis About Kicking Ass - Grantland

Grandmaster Clash: One of the most amazing feats in chess history just happened, and nobody noticed - Slate

A Coming-Out Party For The Humble Pawpaw, Native Fruit Darling - The Salt.  Quite a few of these grow on the farm I live on.

Farmaceuticals: the drugs fed to farm animals and the risks posed to humans - Reuters

Keeping Heirloom Apples Alive Is 'Like A Chain Letter' Over Many Centuries - All Things Considered, and The Comeback Of The Endangered Colorado Orange, An Apple -The Salt

California town faces life without water - Financial Times.  In the Central Valley.  My guess is that agricultural irrigation wells lowered the aquifer below residents' well depths.

What next for the United Kingdom? - Pieria

How to Defeat ISIS, According to Ted Cruz - The Atlantic.  What an asshat douchebag.  Cruz panders to the biggest idiots in the Republican party.

World Should Prepare for 11 Billion or More People - Scientific American.  I don't think that will work out well.

 How Gary Hart's Downfall Forever Changed American Politics - New York Times

Boeing Faces a Future Without Fighter Jets - Wall Street Journal.  The slideshow is worth checking out, even though it is of B-17s and not fighters.  The article also features a photo of a P-51, which was manufactured by North American, which was later purchased by Rockwell, and finally by Boeing, in 1996.  I don't understand why the P-51 would be featured in a story about declining F-15 and F/A-18 sales, but World War II planes are cool.

Why is the USDA Buying Submachine Guns? - Modern Farmer.  Yikes.

Crossing the Line - Texas Observer and A fracking story too good to be true - Bloomberg.  Also, The Great Frack Forward - Mother Jones.  The fracking boom hits China.

Bees and Ants on How to Make Decisions - Wall Street Journal, but see Ants Are Cool but Teach Us Nothing - Bloomberg

Alibaba Debut Makes a Splash - Wall Street Journal.  Crazy. 

Friday, September 19, 2014

Sold Out

The Pabst Blue Ribbon collection of legacy beers has been sold to a Russian corporation:
The iconic American Pabst Blue Ribbon brand will soon be owned by a Russian company under a deal to sell the Los Angeles-based brewer for an undisclosed sum.
Pabst Brewing Co., with such beer brands as Colt 45, Old Milwaukee and Schlitz, was acquired by four years ago by C. Metropoulos & Co. It's now being sold to Russia's Oasis Beverages and private-equity firm TSG Consumer Partners LLC. The price tag for Pabst is thought to be between $700 million and $750 million, The Wall Street Journal reports.
WSJ says:
"Oasis has operations in Russia, Ukraine, Kazakhstan and Belarus, according to its website. As well as beer, the company makes soft drinks and juice.
"TSG, which invests in consumer brands, has previously owned stakes in vitamin water and Muscle Milk maker Cytosport Holdings Inc."
In a statement, Eugene Kashper, the chairman of Oasis who will become the new CEO of the Pabst called the beer "the quintessential American brand – it represents individualism, egalitarianism, and freedom of expression – all the things that make this country great."
"The opportunity to work with the company's treasure trove of iconic brands, some of which I started my career selling, is a dream come true," he said in a statement. "It will be an honor to work with Pabst's dedicated employees and partner distributors as we continue to build the business."
The statement said that the company would remain headquartered in Los Angeles.
And also a private equity investor.  That's probably worse than the Russian.

Pabst was the AGCO of beer companies, with a sizable collection of old regional beers that had gone under.  With InBev, SAB and MolsonCoors, there just aren't too many 100% American beer companies around.