Macallan Fine Oak - 15 Year Old

A couple of years ago I decided to tell everyone that if they didn't know what to get me, there was always scotch. Since then I have not lacked for scotch in the pantry.

Color: Gold
Nose: Clean and sweet
Palate: Gentle
Body: Smooth
Finish: Short but pleasant

Macallan has been distilling scotch near the Spey River since 1824. They use small stills and claim that makes a better scotch.

The fine oak series is matured in three different types of oak: European sherry oak casks, American oak casks seasoned with sherry and American oak casks seasoned with bourbon. It makes for an exceptionally smooth scotch. This particular selection was picked out by my 15 year old grandson for Father's Day. No, he didn't taste it - he went with his instincts.

There's something special about sipping a scotch picked for you by a loved one.

Lease Sale - Finally!

The government finally held a lease sale for the Gulf of Mexico and it set records. They offered 7,434 blocks (a block is a 3 mi x 3 mi square) in the Gulf of Mexico between the Texas/Louisiana border and the Alabama/Florida border. 56 companies made 593 offers on 454 bocks which brought in a check for $1.7 Billion to the government. This money only gives the companies the right to drill for oil and gas for 5 to 8 years.

Here's how the numbers stacked up:

Statoil made the highest single bid of $157.1 Million for a single block. In total, they bought 26 blocks for $333.2 Million.

Shell spent the most, dropping $406.6 Million for 24 blocks.

BP spent $337.7 Million to acquire 43 blocks.

If you attend a lease sale, you will probably be bored to death as it involves a guy reading out the bids on all these leases. But the room is full of people who are involved in oil field poker game and want to see who did what. They studiously take notes on the results. It's most interesting when one company spends a lot of money to acquire a lease and leaves a lot of money on the table between his bid and the next highest.

An example is Mississippi Canyon 162. There were 7 companies trying to get this block. Chevron won it with a bid of $51.2 Million. The next highest bid was $40.7 Million, which means they over bid by about $10 Mil. The lowest bid was for $600,000. This could cause someone to wonder what Chevron saw that nobody else did. They won't know until they drill it, and then a geologist could either be a hero or looking for a new job.

It will take several years for these lease to be productive. First they have to line up budget funds and schedule drilling rigs. After drilling, they will need to evaluate the results and come up with development plans. But it's a good sign that the Gulf will be getting busy and that there will be new projects in the works.

Energy Cost Rogues Gallery

Last month I blogged about the rising cost of electricity due to Obama's EPA regulations on coal plants. Yesterday, the Senate took up a resolution to strike down Maximum Achievable Control Technology (MACT). It failed by 4 votes!

Go here to see how your Senator voted. And you folks in the northeast. Your RINOs just voted to add another burden on you. You can expect your electricity costs to skyrocket! But, it's not a tax. And you can always keep warm chopping firewood.

Executive Privilege

Is it just me, or is the proper time to assert Executive Privilege is when the subpoena is first issued and not after months of hearings and threatening letters and when you finally need to assert it in order to protect the ass of a direct report who probably isn't worth saving in the first place and whose incompetence placed you between this rock and that hard place?

If it truly was Bush's fault, why aren't you showering Mr. Issa in documents that confirm that?

It's clear to me that the rock is being kicked over and all kinds of critters will come scurrying out. What I don't understand is why Obama is trying to protect Eric Holder, unless he has pictures of Obama being amorous with a goat, or something.

Maintenance

I did a little maintenance on the blog roll. I cleaned up a few links and added two interesting blogs. Go take a look at Improbable Research and Retro Things.

Paralysis by Analysis

So I went to our bi-weekly meeting where the different discipline groups involved in this project get together to compare notes and swap information. In this one, our illustrious Reservoir Engineers broke the news that the temperature of the reservoir is thought to higher than anticipated. (They do this by "modelling" the thermal gradient as they have no direct temperature measurements) The problem is that if the temperature of the oil is higher than a certain maximum temperature, it could cause problems for the equipment used to produce the oil. After listening to a maddening description of his "study methodology", he informed us that his conclusion was: "We just don't know enough and need to do more modelling!"

Color me gobsmacked! All I need to know is that even if there is possibility that the temperature could be higher than planned, that we have a contingency plan to deal with it - even if it means cutting back on production rates for a few months. Then we can continue with the design with no schedule delay. But everyone else seems to want to do the studies so we came away with about 5 more "action items".

I marvel that gas prices ares as cheap as they are.

Book Review - The Lost Ones

This is Ace Atkins sequel to "The Ranger". Quinn Colson is now sheriff. He has to deal with a old friend who is selling guns to a Mexican drug cartel as well as a baby smuggling ring. There is also a side plot where we learn a little more about Quinns younger days and his sister, who has returned home.

This one did not grab me like the first book, but it is still a good read.

USS Miami

On May 23 of this year, the USS Miami (SSN-755) had an onboard fire while it was in dry dock at Portsmouth Naval Shipyard undergoing a 2 year refit. It took 10 hours to put the fire out. 7 firefighters were injured trying to fight the fire within the confines of the submarine. The fire was limited to the forward spaces. The reactor, which had been shutdown, was not in any danger. The cause has been determined to be an industrial vacuum cleaner that had picked up a "heat source" (weld slag, cigarette butt?) and then caught fire. The Navy continues to evaluate the damage and cause.

If you are a submarine history buff, you will remember that it was on May 23, 1939 that the USS Squalus (SS 192) , also a Portsmouth boat, was sunk. There must be something about that day that causes problems for submariners and PNSY.

Scary Stuff

The Senate Armed Services Committee recently published a study concerning counterfeit electronic parts finding their way into military aircraft. The study's conclusions sent chills up my spine:

1: China is the dominant source country
2: The Chinese government has failed to take steps to stop counterfeiting operations that are taking place openly.
3: The DoD lacks knowledge of the scope and impact of these parts on critical defense systems
4: Counterfeit electronics can compromise the performance and reliability, risk national security and endanger the life of military personnel
5: Permitting contractors to recover any costs incurred as a result of their own failure to detect these parts does not encourage the adoption of aggressive detection programs
6: The defense industry's reliance on unvetted distributors results in unacceptable risks to national security and safety of military personnel
7: Weaknesses in the testing regime for electronic parts creates vulnerabilities that are exploited by counterfeiters
8: The defense industry routinely failed to report cases of suspected counterfeit parts

To read the entire report, go here.

The use of counterfeit parts has long been a concern of mine and others. China is well known as the counterfeit capital of the world. Even when you get a "certificate" from an international authority, you cannot be certain that it is not a forgery. And once a part has passed through several distributors, it is difficult to trace its country of origin. We are seeing this now in things like pipe fittings, bolts and small valves.

And if you think this is limited to the military, don't be fooled. Remember the Chinese dry wall fiasco after Katrina? Remember the lead paint on childrens toys? Now take a look and see how much of what you buy is "Made in China". Now stop and think.....what if the engine on the plane you are flying in was overhauled using Chinese parts? Do the bolts have the proper strength? Are the turbine blades in the engine made of the correct high temperature material?

When your life can hang on the integrity of something as simple as a bolt and nut, you want them to be the best and not counterfeit.

And here is some final food for thought.....If China thinks they may have to fight the US at some time in the future, wouldn't it benefit them if our weapons systems failed at critical times?

Walkabout

Bro-in-Law has reached Pearisburg, VA on his hike of the Appalchian Trail. That 626 miles down so far.

On Wisconsin

On, Wisconsin! On, Wisconsin!
Grand old Badger State!
We, your loyal sons and daughters,
Hail thee, good and great.
On, Wisconsin! On, Wisconsin!
Champion of the right,
"Forward", our motto,
God will give thee might!

Perhaps Obama might want to re-think his new "Forward" slogan based upon yesterdays recall election results and the state song lyrics.

Dead Duck Day

Today is Dead Duck Day in Rotterdam. To find out why, click on "Improbable Research" over on the sidebar. It's SFW and should give you a giggle or two. (Warning - the account describes bizarre avian sexual practices and is not for the feint of heart)

But now I wonder - Was it suicide.......or murder?

Head Count

The Kingdom of Saudi Arabia ratcheted up executions in May by beheading 8 murderers. This brings the Year to Date total to 27.

State of the Gulf

A new report from Southern Methodist University summarizes the impacts of the federal regulatory changes after the Macondo blowout. Here is a summary:

• Total active rig counts in the Gulf are far short of pre-moratorium numbers. In May 2010, there was an average of 27 “active” rigs in the Gulf – those engaged in drilling activities as opposed to maintenance, completions, and workovers. As of May 1, 2012, there were only 18 total active rigs in the Gulf.

• Production in the Gulf is down by 30 percent over projections. According to the Energy Information Administration (EIA), Gulf production fell from 1.55 million barrels per day in 2010 to 1.32 mb/d in 2011. This year, EIA estimates Gulf output will fall further to 1.23 mb/d. But two years ago, before the moratorium, EIA predicted that production would reach 1.76 mb/d this year.

• Federal revenues from Gulf activity have dwindled: Under the Obama administration, offshore lease sales have gradually declined each year, depriving the U.S. Treasury of a sorely needed source of revenue. During 2008, $9.4 billion was generated in new offshore lease bids. That dropped to $1.1 billion during the recessionary year of 2009, $979 million in 2010, then a paltry $36 million in 2011 as only one lease sale was held during the entire year.

• Deemed ‘submitted’ period expanded: When an operator submits a plan, regulators first determine whether it meets the initial criteria to be ready for review, or deemed “submitted”. No one officially tracks this phase. The SMU report reveals that the average number of days to obtain approval for a plan from original submission to final approval has risen from 50 days pre-Macondo to 207 days – attributable to the fact that the average number of days from original submission to deemed “submitted” has ballooned to 160 days since Macondo.

• Permit approval claims overblown: Since early 2012, the administration has touted the number of permit approvals issued for unique wells in the deep waters of the Gulf – claiming in early March 2012 to have approved permits for 94 unique wells. Yet only 32 of those 94 permits covered unique new wells specifically permitted to reach hydrocarbons. The rest applied either to pre-moratorium wells in need of revised plans, or permits that allow shallow batch set depths, which need additional permits to reach total depth for hydrocarbons.

• Just in time permitting breeds uncertainty: Current drilling permit approvals are being issued on a “just-in-time” basis, sharply hindering a company’s ability to plan for the next job. A back-log of at least three approved drilling permits is sought for each active rig in order to secure the long-term contracts that the industry utilizes. With 18 active deep-water rigs, the inventory of approved permits should be at least 54. As of March!31, there were only 6 – leading companies to question where their rigs will be going next.