Windows on the World of Raymond Plank
Founder, Apache Corp
Vol. 2011 No. 9


“It was the night before Christmas, and all through the house, not a creature was stirring, not even a mouse,” words the five children of my first wife loved to have me read them before climbing into bed eager to open their mounting presents in the morning that they’d shaken and guessed about, plus hoping Santa would come during the night.

Seventy years ago today, Pearl Harbor Day December 7th, 1941 ended President Franklin D. Roosevelt’s ambiguity over whether to join the war on foreign soil to stop Adolph Hitler’s bid for world domination and Emperor Hirohito’s forces bent on China and Far East conquest. The Rising Sun, the flag of Japan, was to fly over much of the Far East before halted by largely Americans.  While decades later Americans and foreigners alike burn our Star Spangled Banner, our symbol of freedom and liberty.  A few days short of music of the season peels out Peace on Earth; Good Will Toward Men, it would seem some were indifferent or would prefer anarchy to citizenship and duty. 


On a bench nearby is a 10 pound piece of black petrified wood which lay on the Western Desert of Egypt, from the Oligocene geologic age, 30 million years ago, a long time in comparison to the 70 years which have transpired since “When Johnnie comes marching home again” in 1945-1946.  In the next 40 years the U.S. and world participated in the greatest rise of living standards except among the abysmally poor, uneducated, and starving. 

And so, here we are again, poorly lead and poorly served, in our land of plenty, while bereft of the principles, and leadership with a society gridlocked to the point where self-interest, greed, and ego befitting sociopaths caste the fear of under or no employment, job loss, across our paths through the muck of socio-political tremors in our land of plenty, including excesses and excuses.

If all those who died in wars since World War I, which ended in 1918, were to rise like Rip Van Winkle, what would they feel, think, and say?  For all our startling advances in technology and communications, what might old Rip say?  (I think I’ll go back to sleep and enjoy a long winter’s nap?)


We do not have that privilege.  Do we hear the call of citizenship and duty?  

Who would have thought that an American president, the first black man to become president of the U.S., would be written about as he is in the enclosure from the Washington Post, with two other reporters from New York and San Francisco?

I’ve labeled it Exhibit 1 and have no further comment.

The second enclosure (Exhibit 2) is that provided by the “world’s greatest marketer,” Warren Buffet, dealing with the runaway impact of excessive, wasteful federal expenditures, and announcing his approach to government and congressional reform on CNBC some months ago.

The third enclosure (Exhibit 3) is a remarkable Academy Award winning documentary aired for TV entitled “Inside Job,” directed by Charles Ferguson and produced by Sony Pictures Classics.  As Goldman Sachs executives were being questioned by a government committee, their facial expressions of defensive guilt illustrate "a picture being worth a thousand words."

Despite the assurances of the president, the greed ballgame continues.  I commend the documentary to your attention: Inside Job. 

The fourth enclosure (Exhibit 4) shares more information on the renaissance of North Dakota from the NDIC Department of Mineral Resources.  With the surge in deep horizontal drilling combined with hydraulic fracturing, the United States has the opportunity to add a million jobs, to extract ourselves from Debt Mountain dependence on foreign crude, and a higher order of energy security.   

It’s 4:30 mountain time, the sun has set but the sky remains clear, and the wind is still, so are the wild turkeys who scratched away the snow to eat the corn I buy for them.  And there’s three does and a large white tail buck who joined the search for corn which last year cost $9.35 per fifty pound bag – up about 42% this year to $13.25 (not included in the exploding price index).

I wonder if we all might feel better about Christmas this year if we sat down and wrote 500 letters to Congressmen requesting they allow, without further delay, our nation’s energy resources to be developed along with jobs; our economy and faith restored and that caring individuals can make a small difference.

Merry Christmas!



August 18, 2011

Obama: The Affirmative Action President

By Matt Patterson

Years from now, historians may regard the 2008 election of Barack Obama as an inscrutable and disturbing phenomenon, a baffling breed of mass hysteria akin perhaps to the witch craze of the Middle Ages.  How, they will wonder, did a man so devoid of professional accomplishment beguile so many into thinking he could manage the world's largest economy, direct the world's most powerful military, execute the world's most consequential job?


Imagine a future historian examining Obama's pre-presidential life: ushered into and through the Ivy League despite unremarkable grades and test scores along the way; a cushy non-job as a "community organizer"; a brief career as a state legislator devoid of legislative achievement (and in fact nearly devoid of his attention, so often did he vote "present"); and finally an unaccomplished single term in United States Senate, the entirety of which was devoted to his presidential ambitions.  He left no academic legacy in academia, authored no signature legislation as legislator. 


And then there is the matter of his troubling associations: the white-hating, America-loathing preacher who for decades served as Obama's "spiritual mentor"; a real-life, actual terrorist who served as Obama's colleague and political sponsor.  It is easy to imagine a future historian looking at it all and asking: how on Earth was such a man elected president? 


Not content to wait for history, the incomparable Norman Podhoretz addressed the question recently in the Wall Street Journal:


To be sure, no white candidate who had close associations with an outspoken hater of America like Jeremiah Wright and an unrepentant terrorist like Bill Ayers would have lasted a single day. But because Mr. Obama was black, and therefore entitled in the eyes of liberaldom to have hung out with protesters against various American injustices, even if they were a bit extreme, he was given a pass.


Let that sink in: Obama was given a pass -- held to a lower standard -- because of the color of his skin.  Podhoretz continues:


And in any case, what did such ancient history matter when he was also articulate and elegant and (as he himself had said) "non-threatening," all of which gave him a fighting chance to become the first black president and thereby to lay the curse of racism to rest?


Podhoretz puts his finger, I think, on the animating pulse of the Obama phenomenon -- affirmative action.  Not in the legal sense, of course.  But certainly in the motivating sentiment behind all affirmative action laws and regulations, which are designed primarily to make white people, and especially white liberals, feel good about themselves. 


Unfortunately, minorities often suffer so that whites can pat themselves on the back.  Liberals routinely admit minorities to schools for which they are not qualified, yet take no responsibility for the inevitable poor performance and high drop-out rates which follow.  Liberals don't care if these minority students fail; liberals aren't around to witness the emotional devastation and deflated self-esteem resulting from the racist policy that is affirmative action.  Yes, racist.  Holding someone to a separate standard merely because of the color of his skin -- that's affirmative action in a nutshell, and if that isn't racism, then nothing is.  And that is what America did to Obama.


True, Obama himself was never troubled by his lack of achievements, but why would he be?  As many have noted, Obama was told he was good enough for Columbia despite undistinguished grades at Occidental; he was told he was good enough for the US Senate despite a mediocre record in Illinois; he was told he was good enough to be president despite no record at all in the Senate.  All his life, every step of the way, Obama was told he was good enough for the next step, in spite of ample evidence to the contrary.  What could this breed if not the sort of empty narcissism on display every time Obama speaks?


In 2008, many who agreed that he lacked executive qualifications nonetheless raved about Obama's oratory skills, intellect, and cool character.  Those people -- conservatives included -- ought now to be deeply embarrassed.  The man thinks and speaks in the hoariest of clichés, and that's when he has his teleprompter in front of him; when the prompter is absent he can barely think or speak at all.  Not one original idea has ever issued from his mouth -- it's all warmed-over Marxism of the kind that has failed over and over again for 100 years.


And what about his character?  Obama is constantly blaming anything and everything else for his troubles.  Bush did it; it was bad luck; I inherited this mess.  It is embarrassing to see a president so willing to advertise his own powerlessness, so comfortable with his own incompetence.  But really, what were we to expect?  The man has never been responsible for anything, so how do we expect him to act responsibly?


In short: our president is a small and small-minded man, with neither the temperament nor the intellect to handle his job.  When you understand that, and only when you understand that, will the current erosion of liberty and prosperity make sense.


Read more:




OCTOBER 28, 2011, 11:00 AM ET


The Warren Buffett Chain Letter 

Bloomberg News 

There’s a good chance your email inbox or Facebook news feed has recently been spammed with a chain letter that contains a novel idea attributed to Berkshire Hathaway billionaire Warren Buffett to eliminate the deficit.

To wit: Make a Constitutional amendment that would make all members of Congress ineligible for re-election if the deficit exceeds 3% of gross domestic product. That way, the argument goes, congressmen would have a strong incentive to make compromises and balance the budget.

Part of the quote is real. In July, he told CNBC’s Becky Quick:

BUFFETT: I can— I can— I can end the deficit in five minutes.




BUFFETT: You just pass a law that says that anytime there’s a deficit of more than 3% of GDP, all sitting members of Congress are ineligible for re-election. Yeah. Yeah. Now you’ve got the incentives in the right place, right?


In an email, a Berkshire spokeswoman said that the company has heard from quite a few people who have received the chain letter, but that (and this is a shocker) Buffett had never suggested someone start one. In fact, the spokeswoman wrote that he never even meant it as a serious proposal and just wanted to emphasize the importance of proper incentives.

Buffett’s CNBC quote was apparently tacked onto an earlier chain letter that had been circulating since January.

Putting aside the Buffett connection, would setting up such an extreme incentive be a good plan? 




Inside Job is a 2010 documentary film about the late-2000s financial crisis directed by Charles H. Ferguson. The film is described by Ferguson as being about "the systemic corruption of the United States by the financial services industry and the consequences of that systemic corruption."[3] In five parts, the film explores how changes in the policy environment and banking practices helped create the financial crisis. Inside Job was well received by film critics who praised its pacing, research, and exposition of complex material.



The documentary is in five parts. It begins with a look at how Iceland was highly deregulated in 2000 and its banks were privatized. When Lehman Brothers went bankrupt and AIG collapsed on September 15, 2008, Iceland and the rest of the world went into a global recession.


Part I: How We Got Here

The American financial industry was regulated from 1940 to 1980, followed by a long period of deregulation. At the end of the 1980s, a savings and loan crisis cost taxpayers about $124 billion. In the late 1990s, the financial sector had consolidated into a few giant firms. In 2001, the Internet Stock Bubble burst because investment banks promoted Internet companies that they knew would fail, resulting in $5 trillion in investor losses. In the 1990s, derivatives became popular in the industry and added instability. Efforts to regulate derivatives were thwarted by the Commodity Futures Modernization Act of 2000, backed by several key officials. In the 2000s, the industry was dominated by five investment banks (Goldman Sachs, Morgan Stanley, Lehman Brothers, Merrill Lynch, and Bear Stearns), two financial conglomerates (Citigroup, JPMorgan Chase), three securitized insurance companies (AIG, MBIA, AMBAC) and three rating agencies (Moody’s, Standard & Poors, Fitch). Investment banks bundled mortgages with other loans and debts into collateralized debt obligations (CDOs), which they sold to investors. Rating agencies gave many CDOs AAA ratings. Subprime loans led to predatory lending. Many home owners were given loans they could never repay.


Part II: The Bubble (2001-2007)

During the housing boom, the ratio of money borrowed by an investment bank versus the bank's own assets reached unprecedented levels. The credit default swap (CDS), was akin to an insurance policy. Speculators could buy CDSs to bet against CDOs they did not own. Numerous CDOs were backed by subprime mortgages. Goldman-Sachs sold more than $3 billion worth of CDOs in the first half of 2006. Goldman also bet against the low-value CDOs, telling investors they were high-quality. The three biggest ratings agencies contributed to the problem. AAA-rated instruments rocketed from a mere handful in 2000 to over 4,000 in 2006.


Part III: The Crisis

The market for CDOs collapsed and investment banks were left with hundreds of billions of dollars in loans, CDOs and real estate they could not unload. The Great Recession began in November 2007, and in March 2008, Bear Stearns ran out of cash. In September, the federal government took over Fannie Mae and Freddie Mac, which had been on the brink of collapse. Two days later, Lehman Brothers collapsed. These entities all had AA or AAA ratings within days of being bailed out. Merrill Lynch, on the edge of collapse, was acquired by Bank of America. Henry Paulson and Timothy Geithner decided that Lehman must go into bankruptcy, which resulted in a collapse of the commercial paper market. On September 17, the insolvent AIG was taken over by the government. The next day, Paulson and Fed chairman Ben Bernanke asked Congress for $700 billion to bail out the banks. The global financial system became paralyzed. On October 3, 2008, President Bush signed the Troubled Asset Relief Program, but global stock markets continued to fall. Layoffs and foreclosures continued with unemployment rising to 10% in the U.S. and the European Union. By December 2008, GM and Chrysler also faced bankruptcy. Foreclosures in the U.S. reached unprecedented levels.


Part IV: Accountability

Top executives of the insolvent companies walked away with their personal fortunes intact. The executives had hand-picked their boards of directors, which handed out billions in bonuses after the government bailout. The major banks grew in power and doubled anti-reform efforts. Academic economists had for decades advocated for deregulation and helped shape U.S. policy. They still opposed reform after the 2008 crisis. Some of the consulting firms involved were the Analysis Group, Charles River Associates, Compass Lexecon, and the Law and Economics Consulting Group (LECG).


Part V: Where We Are Now

Tens of thousands of U.S. factory workers were laid off. The new Obama administration’s financial reforms have been weak, and there was no significant proposed regulation of the practices of ratings agencies, lobbyists, and executive compensation. Geithner became Treasury Secretary. Feldstein, Tyson and Summers were all top economic advisors to Obama. Bernanke was reappointed Fed Chair. European nations have imposed strict regulations on bank compensation, but the U.S. has resisted them. 



Director’s Cut

Lynn Helms
 NDIC Department of Mineral Resources

Jul Oil 13,174,225 barrels = 424,975 barrels/day
Aug Oil 13,768,394 barrels = 444,142 barrels/day (preliminary) (all time high)

Jul Gas 13,418,556 MCF = 432,857 MCF/day
Aug Gas 14,309,307 MCF = 461,591 MCF/day (preliminary) (all time high)

Jul Producing Wells = 5,756
Aug Producing Wells = 5,951 (all time high)

Jul Permitting: 136 drilling and 2 seismic
Aug Permitting: 207 drilling and 1 seismic (all time high 245 Nov 2010)

Jul Sweet Crude Price = $90.60/barrel
Aug Sweet Crude Price = $81.43/barrel
Today Sweet Crude Price = $79.00/barrel ND (all time record high $136.29 July 3, 2008)

Jul rig count 177
Aug rig count 192
Sep rig count 197
Today’s rig count is 196 (all time record high 201 Aug 29-31, 2011)

The summer surge is continuing to push hydraulic fracturing activity and production upward. August brought the second month of warm and dry weather and even though rig count was flat, daily production increased almost 5% due to high levels of hydraulic fracturing activity. Bakken and Three Forks formations continue to be the target of over 95% of drilling activity. Bowman County Red River production was stable at about 27,000 barrels per day with one well drilling. The idle well count dropped significantly again to 733 wells, but normal is 450, indicating a continuing backlog of almost 300 wells waiting on fracturing services.

Crude take away capacity with pipeline, rail, and truck transportation is more than adequate for the near term production projections. North Dakota Sweet posted price versus NYMEX-WTI is down to -7.5%.

Rig counts in the Williston basin are holding at recent record levels with more rigs scheduled to be built and transported here by year end. Utilization of rigs capable of

+20,000 feet is more than 95%, but for shallow well rigs that can drill to 7,000 feet or less utilization remains approximately 50%.

The efforts to regulate hydraulic fracturing under the safe drinking water act remain high with EPA now looking at using the diesel fuel provision in the 2005 energy policy act.

Drilling permit activity is high, but still below record levels. As fall approaches and the rig count rises permit activity is expected to increase so locations can be built prior to winter weather.

The number of wells drilling on federal surface in the Dakota Prairie Grasslands is down to 3.

Seismic is very busy with 5 surveys active and 5 pending.

North Dakota leasing activity is focused on renewals and top leases in the Bakken - Three Forks thermal maturity area with significant activity south of Dickinson and west of Belfield. Much of the leasing activity has shifted to Northeast Montana.

Daily natural gas production is up. Processing plant and gathering system construction activity is very high due to warmer weather. US natural gas storage is 1% above the five- year average. North Dakota shallow gas exploration is not economic at the current price.

Natural gas delivery to Northern Border at Watford City price is down again to $3.04/MCF. This results in the oil to gas price ratio of 26 to 1 even though the BTU ratio is 6 to 1. The low value of processed natural gas does not justify investment in infrastructure, but the natural gas liquids make gathering and processing of Bakken gas economic. The policy set forth in statute for the North Dakota Industrial Commission is to promote production and to prevent waste in order that the greatest possible economic recovery of oil and gas is obtained. The Industrial Commission has encouraged and supported various projects that utilize the resource, ultimately reducing the amount of flared gas in oil country. Up to this point in the Bakken play gas has been flared at record levels in order to promote the resource to the natural gas gathering and processing industry and demonstrate the size and potential of the resource. The result is a plan presented by industry to invest over $3 billion in natural gas gathering and processing infrastructure in 2011, 2012, and 2013. As this investment is made and gas-gathering infrastructure is built, Commission policy can be expected to focus even more toward preventing waste in the natural gas arena.