HELLO TECHNOLOGY

 t. man hatter
One of the concerns of environmentalists when it comes to pipelines is safety. Actually, that's one of their concerns when it comes to just about anything, but we digress.

Yet pipelines like just about every other thing around undergo technological changes as in benefit from new technology.

Pipeline spills, owing to corrosion, rupture and the like are common. And that can spell messy more ways than one. Spills and leaks, irrespective of their origins, cause costly damages to the environment and the pipeline companies.

Last year, according to oilprice.com, "over 119,000 barrels of oil were spilled." Many of America's pipelines are joining the baby boom generation. They're getting older. And like their baby boomer brethren they start to creak, corrode and rust.

That leads to new generations of pipelines to push aside the older ones. If you've lived a while in this dimension you'll understand what we're saying. And that's where technology comes aboard.

One of the major ways pipeline operators detect corrosion is with a “pig,” a machine that travels down the inside of a pipeline looking for problems.

Pigs are not new — the industry has long relied heavily on them—and the newest generation of pigs, known as “smart pigs,” is considered an improvement over the pigs of yesterday. Smart pigs give a read on the state of the pipeline, such as cracks, corrosion, and metal loss. Operators receive this information in a control room and can then dispatch crews to fix the problem. As of 2012, 93 percent of pipeline inspections were conducted using smart pigs.

But smart pigs might not be enough. Enbridge (NYSE: ENB), a major Canadian pipeline company, has spent over $4.4 billion to upgrade pipeline safety. It is spending big bucks after one of its pipelines spilled oil into the Kalamazoo River in 2010 – a corrosion breach that Enbridge’s smart pigs failed to detect ahead of time.

And that’s the problem: despite recent advances, smart pigs aren’t terribly accurate. They also require pipeline operations to shut down (you can’t pump oil through a pipeline if there is a machine in the way), and analyzing the data smart pigs gather can take some time. The Wall Street Journal ran an article last year that talked about the pitfalls of smart pigs, even as pipeline companies continue to depend heavily on them.

So alternative methods to detect trouble spots are needed. One method for detecting corrosion uses a device from outside the pipeline. A series of sensors placed on the outside of the pipeline can search for corrosion without interfering in operations.

Pipeline safety company Fox-Tek, a subsidiary of Augusta Industries (CVE: AAO), uses such a system to detect corrosion, as well as a fiber optic system to detect bends, strains and stress in pipelines.

But the real innovation in Fox-Tek’s system is its data analytics package. Companies that use smart pigs usually need to spend months doing post-inspection analysis, but Fox-Tek has developed proprietary software that does continuous and automatic analysis.

To read more about this fascinating development click on the link.

http://www.mining.com/web/new-technology-could-end-the-debate-over-pipeline-safety/

TRAVELING THE WEB

As we travel around the web we look for interesting stuff we think our readers would enjoy. A lot of it catches our interest, but obviously we can't present it all. And then there's that arbitrary thing called taste or interest or, as some might more correctly call it, bias.

We like to try to read both sides of an issue. We should probably say 20 sides given how divided people are today. To be sure, the Web's an interesting place. There's lots of not so good stuff and plenty of smart people who, to the chagrin of MSM, now have a platform to express their views.

The MSM monopoly is over. As a tool of freedom the Web is probably unparalleled. Read it and decide for yourself. Just look at China, Russia and, yes, your United States of America with its ever-encroaching surveillance of its citizens to understand how big a threat Al Gore's discovery is. 

Myths get created more for a reason than by chance. 

With that idea in mind we post this story about Japan and the US, contrary to what MSM has promulgated for years, running parallel economic courses for longer than any lost decade. Just to be clear, we include much of what spews forth from Wall Street's propaganda machine in our definition of MSM.
t. man hatter

http://profitsofchaos.com/2014/07/18/the-myth-of-japans-lost-decade/#more-640

                       

       

CALIFORNIA DROUGHT

t. man hatter
                                                                               Sometimes things show up in the least expected places.

And at a Central California salmon hatchery isn't one of them. But the subject is drought, one of the worst on California record. Yet that's where it sprouted last time a bad drought hit the Golden Bear state.

According to the Wall Street Journal, California farmers "are squaring off against Indian tribes, environmentalists, and fishermen over the Federal release of water to aid salmon."

This dispute is just one small crack in a huge crack in a large wall that separates environmental extremists and others. It's a small metaphor for large forces around the globe at work that eventually have the ability to tear society apart it its very seams. And it's growing.   

Such things become all but routine when the pendulum of common sense swings too far. Food, humans, jobs or salmon? Many would agree that the intolerance of fundamental Islamism and fundamental Christianity are part of the same intolerant pendulum swung too far.

Middle ground in these issues is rapidly joining the middle class, an endangered species rushing towards  non-existence. These are hardly pretty thoughts, but that's the nature of reality. Divisions grow almost daily. The last two administrations, one Republican, the other Democrat, have been among the most divisive in the history of the Republic. Anyone who thinks otherwise is a partisan.

The incompetence and arrogance of politicians and bureaucrats globally provide tinder for the flame that burns dimly, latent for the moment.  But it's there and only the naive and irrational choose to ignore it.

A friend recently stopped by a national grocery chain store to pick up some squaw bread for the upcoming holiday. When she couldn't find any, she inquired about it to the the manager who, to her surprise, told her the vendor a few months earlier informed him they stopped making it.

Reason? The name squaw, which has been around for years describing the delicious brown bread, offended people. So rather than change the name, the company decided to just quit making it. Trivial, you claim? Don't think so.

Here's another recent one. Forget the National Football League's Washington Redskins. This one is a bit more personal. Read "An Interesting Thing Happened To Me Today" at http://www.dailyspeculations.com/wordpress/?p=9617

Like in the stock market, there's the old saying about the straw that breaks the camel's back, a misnomer in our view because nobody knows for sure which straw actually did the damage since they all contribute to the problem.  

Only in retrospect--and even then it's still a lot of guessing-- does what issue tanked the market become somewhat clear.

ANOTHER VIEWPOINT

It's hardly a secret that German officials are resisting QE and some would argue with good cause.

As the graphic above from Marc Chandler's http://www.marctomarket.com shows, the CRB Index and the euro have been like Siamese twins for a  while now. (Yellow line euro, white CRB Index).

Chandler, a well known foreign exchange market analyst, writer and professor, makes some interesting points. This not about, as he notes, a causal relationship.

What we are interested in here is the news today that while the preliminary August euro area headline inflation ticked lower, the core rate actually rose.  In our discussions of the lowflation in the euro area, we have emphasized a three considerations.

First, we argued that the disinflation/deflation in the periphery was the actually a sign that the system (monetary union) monetary union was working.  This can be understood as tantamount to an internal devaluation.  This is the alternative to the external devaluation that so many economists called for when they argued Greece, or Cyprus, or Portugal or Italy, or Spain should exit the EMU, devalue, and perhaps, re-join.  

Second, we argued that to the restoration of competitiveness simply requires a EMU member to have lower inflation than Germany.  Therein lies the rub.  By Germany have such low inflation itself (preliminary August estimate of 0.8%), it forces others to risk deflation.   German officials cringe at the idea that it needs to run higher inflation.  Moreover, Germany industrial and government workers have seen higher wage settlements and a minimum wage has been introduced.  Much to the chagrin of Merkel's critics on her right, the Chancellor has support other social programs, that her coalition partners, the Social Democrats endorse.  

Third, to the extent that the lowflation is a function of weak economic growth and high unemployment (though not in Germany), it may not be amenable to monetary policy.  German officials have been clear in word, and the EU has been clear in deed, that the Stability and Growth Pact allows for greater fiscal flexibility that has been explored up until now.  This does not only refer to giving countries more time to meet the 3% deficit target, but also speaks to the flexibility that the creditor countries, like Germany, are not using.  This seemed to be as much, if not more, of Draghi's message at Jackson Hole.  It is also likely to be the subject of heated debates at the weekend EU Summit.  

The CRB Index put in the low in the middle of last week and has trended higher since.  The 5-day moving average is likely to cross above the 20-day average for the first time in nearly two months. The combination of the weaker euro (-3.6% on a trade-weighted basis over the past six months) and a bounce in the CRB Index could point to a bottom in euro area inflation in the Sept/Oct period. 

Don't think that German officials, both at the central bank and in Berlin, are oblivious to this prospect.  It will give them yet another reason to resist QE.  Some observers have dubbed an ABS purchase scheme as "private QE".  While this might distinguish it from the US and UK, note that the BOJ  buys corporate bonds, commercial paper, REITS and ETFs.  Moreover, the Fed and BOE made their asset purchases in the secondary market, which also gave funds to private (institutional) investors.  

 

If the bottom in eurozone inflation registers in September/October, as mentioned, QE from the German viewpoint would be entirely unnecessary. So you might want to watch the CRB Index a little more closely.

t. man hatter

 

 

BRATWURST ANYONE?

He may be German, but he just might turn out to be right.

German Finance Minister Wolfgang Schaeuble in a Bloomberg interview at the Medef business leaders' conference near Paris was quoted as saying he agrees "100 percent"  with ECB President Mario Draghi about balancing monetary policy with structural reforms.

 ‘Monetary policy can only buy time,’’ Schaeuble said in the interview yesterday. “Liquidity in markets is not too low, it’s even too high. Therefore I think monetary policy has come to the end of its instruments and therefore what we urgently need is investments, regaining confidence by investors, by markets, by consumers.” 

A lot of people won't like this because it's about staying the course against structural reform at a time when many are asking for some slack when it comes to meeting EU deadlines on debt levels.
  
“I don’t think ECB monetary policy has the instruments to fight deflation, to be quite frank,” Schaeuble said. Domestic demand is driving German growth “because we have high confidence of consumers, investors.” 

“And the main reason why we have such a high confidence is they think our public budgets are sustainable, we will stick to what we have promised and we stick with investment,” he said. 

The absence of inflation in the EU zone continues to plaque central bankers. Inflation slowed this month in the EU, according to recent data, with consumer prices rising 0.3 percent from a year earlier, its lowest rise since late 2009. The euro trading at an 11 month low remains little changed at just  over $1.318.

Schaeuble took note of French President Francois Hollande's  mover to change his cabinet to more pro-business members, saying "It's a good decision."

Perhaps the most telling quote came when Schaeuble was asked about the course France would take. "...my French colleagues will do what's needed to enhance our competitiveness in line with the rules that have been agreed again and again."

He concluded his comments with: “It’s very important that we all know in Europe -- every member state -- that we have to stick to structural reforms and enhance competitiveness, even in Germany,” he said. “We are fine actually, but if we were not to continue to enhance our competitiveness in coming years we would lose our position.”

Slice, dice the bratwurst anyway you want, but doesn't appear to be much culinary digesting room there.
t. man hatter

WHAT THE FRACK IS HAPPENING?

                                                      t. man hatter

Here's a study that may have environmentalists choking on their green tofu over lunch. Worse yet it comes from the paragon of political righteousness, San Francisco, in the state of the same tribe, California.

If the environmentalists don't aspirate some of that tofu, you can bet they roll out some more objections especially one of their true favorites, a call for more studies. The more studies syndrome is about wasting taxpayer money until we get what we want.

SAN FRANCISCO  — The U.S. Bureau of Land Management will resume issuing oil and gas leases next year for federal lands in California after a new study found limited environmental impacts from hydraulic fracturing and other enhanced drilling techniques, the agency said Thursday.

The move will end a halt that has stood since a federal judge ruled in 2013 that the federal agency failed to follow environmental law in allowing fracking on public land in Monterey County.

The study released Thursday was conducted for the BLM by the state-created California Council on Science and Technology. It concluded the current level of fracking and other well-stimulation techniques by drillers to get more oil out of rock formations did not seem to be poisoning water supplies or increasing earthquake risks in the state.

That is partly because fracking and other methods used in California differ from those in some other states, the researchers concluded.

Fracking involves extracting oil and gas from rock by injecting high-pressure mixtures of water, sand or gravel and chemicals.  California drilling typically uses less water and a greater concentration of chemicals in fracking, and drilling is shallower, researchers said. California’s different geology also limits the impacts of fracking, they said.

Researcher Jane Long, who led the steering committee that oversaw the study, acknowledged in a phone call with reporters that researchers had drawn their conclusions while lacking some key information.

The oil and gas industry, for example, is not required to disclose all the chemicals, including toxic ones, used in fracking, although a new state law that goes into effect next year mandates that disclosure.

“The conclusions we reached are based on the data available,” Long said. “We recognize the data is incomplete.”

The Center for Biological Diversity, one of the environmental groups that sued the BLM over the Monterey County fracking, said it was premature for the government to resume selling oil and gas leases before it had harder data.

“This report raises grave concerns about fracking pollution’s threat to California’s air and water, but it also highlights that government officials have never collected the data needed to determine the risks to our state,” Kassie Siegel, director of the center’s climate law institute, said in a statement.

Researchers also cast doubt on projections by the U.S. Energy Information Administration on potential oil reserves in California’s Monterey Shale, a geological formation that’s drawn much interest from oil and gas companies. Early projections of massive amounts of oil in the shell were highly skewed, and more examination is needed before reaching any conclusion, the study said.

What's notable here is these same folks never cast doubt on government agencies when those agencies issue reports favorable to their religion.

http://fuelfix.com/blog/2014/08/28/feds-to-resume-leasing-for-fracturing-in-california/

JOINING THE BIG LEAGUES

Here's a sidebar to blurb we recently did about Mexico and their new business friendly agenda under President Nieto. See "The French Connection."

Mexico will likely get a huge economic boost from reforms to its energy market, according to experts, and the reasons go beyond stripping monopoly power from its state-run oil company.

 Domestic and international businesses have been scrambling to position themselves since Mexican President Enrique Peña Nieto signed a major series of energy reforms into law earlier this month. But one thing is for sure: Experts agree the Mexican economy will reap major benefits from the new legislation—with several organizations estimating that the reforms will generate a 2 percent GDP boost by 2025, and add about 2 million jobs.

http://www.cnbc.com/id/101948520 

SANCTIONS STARTING TO HURT

As we already noted sanctions are starting to cut deeper in the Ukraine mess upping the chances of a Russian recession, according to Bloomberg.

The probability of a recession in the next 12 months rose to 65 percent from 50 percent, the highest since the first such Bloomberg survey in June 2012, according to the median estimate of 26 economists in the poll. Russia will enact additional restrictions in retribution for sanctions imposed by the U.S. and the European Union, according to 15 of 25 economists. Of those, 12 expect Russia to target cars and consumer goods. 

Now economists are often wrong, but forewarned is forearmed as they say.

The ruble tanked, capital is fleeing and inflation is on the rise as the two sides throw economic bombs at each other. One could look for the glass is half full side and be thankful it's not those other kinds of bombs, but any further sanctions could push the recession cart over the cliff. 

Since the start of 2014 Russian sovereign bonds are down more than 11 percent and the ruble dropped 10 percent against the U.S. dollar, Bloomberg reports.

As the sanctions cut both ways, it remains to be seen how staunch European Union members will remain given all the problems there if this continues into fall.



 

MORE JOBS NUMBERS

Here's some more Fed voodoo jobs numbers, one of 24 indicators Fed Chair Yellen is suppose to be tracking, to make us all feel like these folks know what they're doing. MSM will likely run with it.

 It's from the Kansas City Fed and Yellen mentioned the index at Jackson Hole last week. Now we can all take a deep breath and relax they got this covered.
http://blogs.marketwatch.com/capitolreport/2014/08/28/yellen-cited-jobs-index-reaches-highest-level-since-october-2008/ 

ADDICTION HARD TO KICK

 Be careful what you become addicted to or dependent on.

As the situation in Ukraine continues to cloud up the inevitable change of seasons advances respecting  no man or gas importer either.

At least six European countries get all of their gas from Russia, the big bad hydrocarbon wolf of the area. And Putin, like bullies have been doing from the playground to the international scene since the beginning, is threatening to take his gas ball and go home.

Finland, Estonia, Latvia, Lithuania, Romania and Bulgaria receive 100% of their natural gas imports from Russia, the Energy Information Administration said Wednesday.
Romania and Bulgaria receive that gas through pipelines that cross Ukraine.

Overall, 30% of natural gas consumed in Europe (including countries outside the European Union) came from Russia last year, with 16% of natural gas consumed in Europe passing through pipeline networks in Ukraine. 

Top Russian gas importers include Germany and France. In the past, as much as 80% of the Russian gas traveled through Ukraine, but that percentage has fallen to 50% to 60% once a pipeline under the Baltic Sea connected Russia and Germany three years ago, according to the EIA. http://www.marketwatch.com/story/these-countries-have-the-most-to-lose-if-russia-shuts-the-gas-valve-2014-08-27

People want food, water and heat. The good side to all this if it gets worse it will make these countries try to get off the Russian gas fix. And even more so, it most likely will slow down the global warming, climate change madness that's been sweeping the globe the last decade or so.

Germany's huge north to south renewable energy project, a pagan hymn to the God of Greenies, is on cost overload and anything at this point but a success. One of the goals is it's suppose to get Deutschland off those dreaded hydrocarbons and nuclear power.

For now owing to a milder winter last year stockpiles look adequate. But the longer it goes on, the colder it's likely to get.
t. man hatter