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To: Dennis Roth who wrote (166785)4/12/2012 11:30:38 AM
From: Dennis Roth
1 Recommendation   of 183646
 
CS Take on MLPs
Weekly Analysis
Credit Suisse Yield Conference in May 2012
Download Link: sendspace.com 

Reinstated Coverage of ETE and ETP: We reinstated coverage of Energy
Transfer Equity, LP (ETE) and Energy Transfer Partners, LP (ETP) with
Outperform ratings and a target price of $52 for both (Please see the links
for the ETE and ETP note).

Our Top Picks:ETE, NRGM, and DPM.

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To: CommanderCricket who wrote (167086)4/12/2012 11:33:10 AM
From: JimisJim
1 Recommendation   of 183646
 
Natural Gas Signals a ‘Manufacturing Renaissance’

>>>Good part about how this will help manufacturing jobs in US starts a few paragraphs down -- essentially says most gains will come in chemical biz with a 50-1 price advantage in US vs. the world because of the price of ng here vs. oil feed stock for chemicals in the rest of the world<<<

The rapid development of shale gas technology has helped reduce energy imports and, in some cases, encouraged companies producing petrochemicals, steel, fertilizers and other products to return to the United States after relocating overseas. Natural gas exports are growing and terminals built to hold imported supplies are being repurposed for international sales.

The American petrochemical industry, for example, uses natural gas as both its primary raw material, in the form of liquid ethane, and as an energy fuel. And cheaper prices have led to a major expansion of capacity in the United States.

The hydrocarbon molecules in natural gas are split apart and then recombined as building blocks for many products, including bulk chemicals and fertilizers. The chemical ethylene, which is largely derived from natural gas, is used to make things like pool liners, building insulation and food packaging.

According to Kevin Swift, chief economist at the American Chemistry Council, European producers mostly use oil-derived raw materials for making these same products. “The U.S. has a competitive advantage when oil is seven times as expensive as natural gas, but now we have more like a 50-to-1 advantage,” he said. “The ‘shale gale’ is really driving this. A million B.T.U.’s of natural gas that might cost $11 in Europe and $14 in South Korea is $2.25 in the U.S. Partly because of that, chemical producers have plans to expand ethylene capacity in the U.S. by more than 25 percent between now and 2017.”

A 2011 PricewaterhouseCoopers study estimates that high rates of shale gas recovery could result in a million new manufacturing jobs by 2025. Robert McCutcheon, United States industrial products leader at PricewaterhouseCoopers, said in a statement that the revived natural gas industry “has the potential to spark a manufacturing renaissance in the U.S., including billions in cost savings, a significant number of new jobs and a greater investment in U.S. plants.”

The growing commitment to natural gas faces some headwinds because of continuing concern over the safety of fracking, which involves forcing pressurized fluids into shale formations to fracture the rock and release the gas deposits.

Some environmentalists say that fracking can cause drinking water to become contaminated with chemicals and released methane, which is a powerful naturally occurring greenhouse gas and the primary ingredient in natural gas. Other complaints tie the disposal of fracking wastewater to a series of small earthquakes. Some states and municipalities with questions about fracking have imposed temporary moratoriums on the extraction technique.

Despite these issues, natural gas is expanding its reach in manufacturing. The Nucor Corporation, which makes direct-reduced iron in a process heavily reliant on natural gas, said in 2010 that it would build a $750 million facility in Louisiana. In 2004, the company dismantled a similar Louisiana plant and shipped it to Trinidad.

According to Nucor, affordable domestic natural gas means its made-in-Louisiana direct-reduced iron, which is sold in pellet or briquette form as a raw material for steel mills, can be delivered at the same price as the product shipped from Trinidad. “Affordable American shale gas has completely changed the economics for us,” said Katherine Miller, a Nucor spokeswoman.

Methanex, a Canadian company that makes methanol from natural gas is planning to move a plant from Chile to Louisiana, with production to begin in 2014. Gary Rowan, a Methanex vice president, said that his company had also shut down a Louisiana plant in the early 2000s. “Certainly, the outlook for low North American natural gas prices is one of the reasons we selected Louisiana as a new location for our methanol plant,” he said.

Electric utilities see a significant natural gas price advantage over other fuels, but because of pending and potential environmental regulations they are also motivated by its status as the fossil fuel with the lowest carbon emissions. On March 27, the Obama administration proposed the first-ever rule to limit greenhouse gas emissions from new power plants. Natural gas plants are expected to meet the standard, but coal burners will have a much harder time. “The electricity sector is the principal growth area for natural gas under carbon dioxide emission constraints,” said an M.I.T. study titled “The Future of Natural Gas.”

Another advantage, according to Richard McMahon, a vice president of finance and energy supply at the Edison Electric Institute, is that natural gas plants are cheaper to build than coal plants.

“Natural gas generally has a smaller footprint,” he said. “Coal plants need to store coal, but natural gas plants get their fuel from a pipeline and don’t need physical storage.” The Obama greenhouse rules would widen the price gap by requiring new coal plants to include carbon capture technology.

The United States still has a big investment in coal plants, and a transition will be gradual. The federal Energy Information Administration estimates that electricity generation from natural gas will increase about 9 percent in 2012, at the same time that coal production declines almost 5 percent. If there is a constraint on utility commitment to natural gas, it is the fuel’s history of large price fluctuations.

Thomas Farrell, chairman and chief executive of Dominion Resources, a utility that delivers electric power and natural gas to four states, describes natural gas as “very volatile in its pricing. We’re a utility whose customers rely on us to think through 60-year power plant investments, and we’ve found that the best approach is to have diverse sources and not depend on one predominant source of fuel.”

But he added that the company was definitely benefiting from low natural gas prices now. Dominion Virginia Power’s 13 percent natural gas electricity production in 2010 jumped to 17 percent in 2011. The company recently completed a natural gas plant and is constructing another, but it also has large nuclear and coal investments.

The share of natural gas as a transportation fuel has never been large, but it is growing rapidly. Refueling is an issue, because there are about 1,000 natural gas stations in the United States (compared with nearly 160,000 gasoline stations) and only half of those are open to the public. Only one automaker, Honda, sells a natural gas passenger car on the American market, and consumers are unlikely to buy them in large numbers any time soon. But the opportunities for truck fleets are quite different.

Almost 40 percent of new garbage trucks and 25 percent of new transit buses can run on natural gas, said the trade organization Natural Gas Vehicles for America. Dan Ustian, chief executive of the truck maker Navistar, said that garbage truck number could grow to 50 percent by the end of next year. Navistar is also building long-range trucks.

Although natural gas cars and small trucks usually run on compressed natural gas, known as C.N.G., to avoid frequent refueling, the larger trucks will mostly use the liquefied form, L.N.G., which has much greater energy density per volume (but must be kept at very cold “cryogenic” temperatures).

Mr. Ustian estimates that, because of quick paybacks with a $1.50 a gallon equivalent price advantage, natural gas could capture 10 percent to 20 percent of the new tractor-trailer vehicle market within a year.

Chrysler, Ford and General Motors have all recently introduced “bifuel” pickup trucks that can run on both natural gas and gasoline. To ensure that such trucks have a place to fill up, Navistar has joined with a natural gas provider, Clean Energy Fuels, and Pilot-Flying J Travel Centers to locate stations 250 miles apart along Interstates. By the end of the year, Clean Energy hopes to have 75 stations open in 33 states.

Andrew Littlefair, president and chief executive of Clean Energy, said that the aim was to make natural gas refueling available on the major trucking corridors. “You don’t need 23,000 truck stops with natural gas,” he said. “You need hundreds in the right places and you can move a lot of fuel. These stations will be where the trucks go now, and the economics look very good.”

In March, Chesapeake Energy, a major natural gas producer, and General Electric said they would collaborate on developing natural gas infrastructure for vehicles, including construction of more than 250 C.N.G. stations beginning this fall.

The prospects exist for American producers to become significant natural gas exporters. In 2011, Dominion won approval from the Energy Department to export L.N.G. from its Cove Point terminal in the Chesapeake Bay to about 20 countries that have free trade agreements with the United States. It has applied for a permit to service the rest of the world. Dominion said that its terminal work force — initially intended to handle imports before the United States became a powerhouse producer — could nearly double with the added workload.

“It’s definitely ironic,” Mr. Farrell said. “Ten years ago, even the futurists wouldn’t have predicted that we’d be exporting natural gas today.”

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To: upanddown who wrote (167093)4/12/2012 11:49:21 AM
From: Big Dog
3 Recommendations   of 183646
 
Hey!!!!! Let an ole Dog get tossed a bone now and then! :)

big

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To: CommanderCricket who wrote (167092)4/12/2012 11:57:36 AM
From: Covenant
3 Recommendations   of 183646
 
IOC Management is the main element of the short case

I try to keep an open mind about those short IOC and believe the only risk for Interoil is country risk. That's it.


E&Ps face country risk all the time. It is part of the business. PNG is worse than some places and better than others. True country risk does not become fully apparent until large amounts of cash are being produced. It is at that time when countries try to figure out the best ways to convert company money into country money. PNG to date hasn't shown themselves to be particularly greedy vs. places like Venezuela, Argentina or Iran. The greediest countries tend to have production problems because reinvestment is not attractive.

IOC's risk is its management. Mulacek's testimony was described by a judge as "not credible". In other words, the judge called him a liar. Starting from this baseline, you have to wonder what is credible in company numbers. How much of the contingent resource estimate is because of the grossly understated LNG plant cost estimates making some of the gas economic where it would not be economic with proper cost estimates? I don't know the answer, but Mulacek is not the type of guy who inspires the confidence to provide benefit of the doubt. This is probably the main resource risk.

The other management risk relates to division of spoils. The "deals" with EWC and others have always been ones where IOC gains most of the economic benefits while these partners provide the funding and take on the associated economic risks. Putting aside the fact these "deals" will likely never come to fruition, is this a realistic expectation? Absolutely not.

It has been several months since IOC was told to partner with a major and produce a realistic plan. There does not seem to be much progress on this front after the initial flurry of press releases.

Why has IOC failed to attract a major? Is it the resource itself or the division of spoils? Either reason is not good for valuation.

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To: upanddown who wrote (167093)4/12/2012 12:21:33 PM
From: Jane4IceCream
2 Recommendations   of 183646
 
LOL....careful the Dog runs a tight ship here! Hey he's not bad!

Jane

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To: Covenant who wrote (167097)4/12/2012 12:21:58 PM
From: CommanderCricket
2 Recommendations   of 183646
 
Covenant,

"IOC Management is the main element of the short case"

It might be but if that's the case, I'm confident the shorts are going to lose this one. Thanks for laying it out.

I'm not an apologist for management and think they made some bone headed decisions with getting cute on trying to manage the gulf LNG program themselves and allowing their relationship with Petromin to go bad.

Management will cut a deal as they don't have a choice. The board and their shareholders are not going to let them go on much longer either.

I'm long and have skin in the game. We'll see what happens in the next few months but suspect the news will be better than it has been.

Michael

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To: tom pope who wrote (167078)4/12/2012 12:27:48 PM
From: Dennis Roth
1 Recommendation   of 183646
 
Shell Says No Signs Of Leak in Its US Gulf Operations
rigzone.com 

Thursday, April 12, 2012 - Shell said that an oil sheen floating in the Gulf of Mexico didn't stem from 2 nearby O&G platforms owned by the oil giant, and that the amount of oil in the sheen was small.

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From: CommanderCricket4/12/2012 12:42:48 PM
1 Recommendation   of 183646
 
My, oh my....getting a little frothy today


China GDP Speculation Lifts Risk

Published: Thursday, 12 Apr 2012 | 11:22 AM ET

By:Patti Domm
CNBC Executive News Editor

Optimism that China can overcome a hard landing put a bid in risk assets and hit the dollar Thursday morning.



Grant Faint | Photodisc | Getty Images
A very specific rumor circulated that China’s first quarter GDP will come in at 9 percent, rather than the expected 8.4 percent, when released overnight.

Whether the rumor is true or not did not matter to traders. The dollar sunk, the euro rose, and commodities-based currencies edged higher. Stocks jumped, copper rose, and oil moved higher.

“I tend to be suspicious of Chinese economic data rumors,” said Marc Chandler, head of foreign-exchange strategy. He said the reason it has impact is because people believe China was close to further easing policy.



China’s Shanghai indexrose 1.8 percent Thursday. Bank lending in China was reported overnight to have surged to the highest amount since January 2011. There was also stronger-than-expected growth in money supply, which rose 13.4 percent in March from a year ago.

Miller Tabak market strategist Peter Boockvar said it’s possible the GDP rumor could have started with a wire service story, quoting a Chinese government researcher. He said the researcher said he thought GDP could be 9 percent for the full year, but 8.4 to 8.5 percent for the quarter.

“What he said was the number is going to be in line tonight, so I can’t really explain what’s going on here,” he said. “Either way, the China news overnight was pretty positive in terms of loan growth, but no one, of course, cares.”

Investors have been watching for the important release of Chinese data Friday morning, including GDP, retail sales, and industrial production.

Joshua Brown, financial advisor with Fusion Analytics, said in an email that even if the GDP number is disappointing, it could be a positive for risk assets, in that it could lead to a cut in lending rates.

Whether China faces a hard landing or not is one of the biggest concerns in markets. Stocks and other risk assets were also helped in early trading by comments from New York Federal Reserve President William Dudley and Fed Vice Chair Janet Yellen, who continued to defend the Fed’s expectation that it will keep rates low through 2014.

The Dow Jones Industrial Average, up triple digits mid-morning, was also lifted by Hewlett-Packard [HPQ 24.90 1.49 (+6.36%) ], after a study showed stronger shipments of personal computers early in the year.

The China rumors also coincided with talk from Europe of a big asset-allocation trade out of U.S. Treasurys and German Bunds and into U.S. and German stocks, and other European markets.

“Overnight we also had really positive Australian employment data so that bodes well for the idea the Asian pacific is not as moribund as people thought it was,” said Boris Schlossberg of GFT Forex.

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From: CommanderCricket4/12/2012 1:00:33 PM
3 Recommendations   of 183646
 
Climate Dissent Launches at NASA
By Peter C Glover
Posted on Apr. 11, 2012



That’s the thing about flying to the moon. It gives you an untrammelled perspective and respect for the real world, facts and hard data. In a blast worthy of a rocket launch, 49 former NASA scientists, astronauts and engineers have finally had enough of NASA’s climate advocacy role. Going public with a letter to Chief NASA Administrator Charles Bolden, the group pulled no punches in asserting the lack of empirical evidence in support of the agency’s “extreme position” as a bastion of climate change alarmism.

The letter’s co-signatories “respectfully request” that both NASA and its Goddard Institute for Space Studies (GISS) – the latter run by the high priest of climate alarmism James Hansen – refrain from making “unproven remarks in public releases and websites”. Claims that man-made CO2 is having a catastrophic impact on global climate change are “not substantiated, especially when considering thousands of years of empirical data.” And, alluding indirectly to the high-profile headline grabbing alarmism of James Hansen and his GISS team, the letter emphatically states “the science is NOT settled”.

The eminent group of co-signatories, including respected astronaut Walter Cunningham, flight designer Michael Collins and chief flights dynamics division engineer for 40 years, Dr Kenneth Cox, and a host of senior former eminent NASA ‘glitterati’, have clearly lost patience. They plainly want to bring NASA’s end-is-nigh speculative science back down to earth. The letter cites the “unbridled advocacy of CO2” as the major cause of climate change as nothing less than “unbecoming to NASA’s history of making an objective assessment of all available scientific data”.

The signatories call for an end to “unproven and unsupported remarks” sanctioned by NASA and GISS, “prior to a thorough study of the possible overwhelming impact of natural climate drivers is inappropriate”. The letter amounts to a stark and very public rebuke to both NASA and the GISS headed by its alarmist-in-chief, James Hansen.

Why NASA has consistently failed to rein in Hansen in the light of his litany of scientific errors and predictions speaks volumes for a growing lack of scientific integrity at NASA in recent years. In respect of Hansen, it is a case I was making back in 2008 in ‘Dissing Hansen’. Then I focused on the problems over GISS’s data fiddling, Hansen’s unfounded claims and other bizarre statements and activities. But I also noted two former NASA seniors who were even then battling to save NASA’s reputation from the public alarmist hysteria being spread by Hansen’s NASA GISS team. They were Walter Cunningham and, Apollo 17 moonwalker, Harrison ‘Jack’ Schmitt – both among the current letter’s 49-strong signatories. In a fine article in Launch magazine, entitled ‘Science, Ignorance is Bliss’ and published in mid-2008, Cunningham delivered a blistering denunciation of Hansen for fostering the “current hysteria” and listing a raft of Hansen science data “blunders”. In November 2007, ‘Jack’ Schmitt had gone further abruptly resigning as chair of the NASA Advisory Council and as a member of the Planetary Society specifically over NASA’s and the Society’s stance in promoting the “global climate scare” in the absence of empirical evidence.

As I said back in 2008, “My guess is that Walt Cunningham and Jack Schmitt are not on Hansen’s Christmas card list”. Seems we can now add at least 47 other eminent NASA names that won’t make it in 2012 too.

This new letter now reflects the level of dissent that must run through NASA’s ‘finest’, as it already does in the writings of numerous scientists concerned over NASA’s climate advocacy role. Over the past decade Hansen has, in NASA’s name, variously been shown to have conducted “tremendous data tampering” while assuming a growing persona as the “new Paul Ehrlich”. Hansen even claimed that “climate change is a moral issue on a par with slavery”. During that time, NASA astronaut Buzz Aldrin formally rejected NASA’s global warming fears, stating: “The climate has been changing for billions of years”. Hansen’s own former supervisor, Dr John Theon, also went on record to complain that Hansen had “embarrassed NASA” and yet “was never muzzled”. Just for good measure, Hansen famously wrote on NASA letterhead paper to Queen Elizabeth and to the then British Prime Minister Gordon Brown, in a bid to derail a UK Government decision to build a new coal-fired nuclear plant. Not surprising, as Hansen’s crusading zeal includes the belief that coal is “the enemy of the human race”. Taken together, Hansen’s growing cult status with hard-lobbying activist green groups, including Greenpeace, appears to have paralyzed the NASA hierarchy into inaction, when anyone else would almost certainly have been relieved of their post.


While Al Gore regards NASA’s Hansen as an “objective scientist” Walt Cunningham’s assessment back in 2008 was more ‘empirical’: “NASA should be at the forefront in the collection of scientific evidence and debunking the current hysteria over human-caused, or anthropogenic global warming.” Instead he is forced to lament NASA’s declining scientific gravitas. “Unfortunately”, he writes about NASA, “it is becoming just another agency caught up in the politics of global warming, or worse, politicized science. Advocacy is replacing objective evaluation data, while scientific data is being ignored in favour of emotions and politics.” And Cunningham drove home his point with typically ‘scientific’ force: “Warming in the upper atmosphere should occur before any surface warming effect, but NASA’s own data show that has not been happening.”

NASA’s James Hansen has endorsed a book wanting to “rid the world of Industrial Civilization”. But wouldn’t that mean ridding it of rocket-launching, space-cluttering, fuel-spewing, aeronautic agencies, too? Worth asking him at his next job appraisal, no?

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To: Dennis Roth who wrote (167100)4/12/2012 1:07:40 PM
From: tom pope
   of 183646
 
Yes, the early action was a buying opp. It's now green

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