I think it is important to explain the events leading up to the current Iranian tension, as well as what that tension could mean for the future. There is no great segue into this, so without further ado…
May 2018 – It is announced that the US will pull out of the 2015 Iran Nuclear deal and a “maximum
pressure” campaign is launched with intention on re-negotiating the nuclear deal.
August 2018 /November 2018 /April 2019 – New sanctions are implemented on Iran.
May 5th, 2019 - National Security Advisor John Bolton releases a statement regarding potential Iranian attacks.
May 8th, 2019 – Iran announces they will increase uranium production.
May 9th, 2019 – It is reported Defense Secretary Patrick Shanahan has a plan to send in 120,000 U.S.
Troops in the event of an Iranian attack.
May 10th, 2019 – U.S. Sends a warship and other military equipment to the Middle East.
May 12th, 2019 – Near the strait of Hormuz, four oil tankers are attacked (two Saudi, one Emirati, and
May 14th, 2019 – Multiple Saudi pumping stations are attacked by armed drones. Houthi rebels hiding in
Yemen claim responsibility.
May 15th, 2019 – Partial Evacuation of US embassy in Baghdad ordered.
June 13th, 2019 – Two more Tankers (one Japanese, one Norwegian) are assaulted Strait of Hormuz
while diplomatic discussions take place in Tehran.
June 17th, 2019 – Iran announced that it would surpass the uranium enrichment levels stipulated within
the 2015 nuclear deal in ten days.
June 20th, 2019 – Iran shoots down a United States drone it claimed was invading their airspace. The U.S.
provides evidence that the drone was in international waters.
June 24th, 2019 – President Trump Signs executive orders imposing financial sanctions on Iranian
June 25th, 2019 – Me writing this:
All jokes aside, what does all this mean for the United States and Oil in general?
As June 2019 concludes, the anticipated conflict between the U.S. and the Middle East has prompted international Brent Crude to climb ~5%, while concurrently West Texas Intermediate climbed more than 10%. (WTI’s biggest monthly gain since Dec 2016)
While WTI and Brent crude appear to be trading higher than Pre Iran-Conflict numbers, will this trend hold as we move into July?
Neither Country seems to be gunning for an all-out brawl, but further escalation may be inevitable.
While a factor, Iran is but a small part of a much larger equation that dictates oil pricing. Ultimately Supply/Demand will dictate the future price of oil and uncertainty is likely to lead to volatility.
Keep an eye out for the July Check in!
In 2017, a US investigation into Chinese trade policies was opened. This investigation resulted in tariffs being imposed on billions of dollars’ worth of Chinese products last year, an action that garnered a comparable retaliation from Beijing. After months of rising tensions, both countries agreed to halt new trade tariffs in December to allow for negotiations. Despite an initially positive outlook, the tension has risen even higher with the US having more than doubled tariffs on 200 billion dollars’ worth of Chinese products. Beijing responded in kind just three days later with tariff hikes on 60 billion dollars’ worth of US goods.
The tariffs imposed on Chinese goods should, in theory, make US-made products cheaper than imported ones, and encourage consumers to buy American.
What exactly are the tariffs in place?
Last year, the US imposed three rounds of tariffs on upwards of 250 billion dollars’ worth of Chinese goods. They cover a wide range of industrial and consumer items. Beijing retaliated with tariffs on 10 billion dollars of US goods and accused the US of starting "the largest trade war in economic history". China has targeted products including chemicals, coal and medical equipment with duties that range from 5% to 25%. They have also targeted products made in US districts with strong support for the Republicans, and goods that can be purchased elsewhere, such as soybeans.
Rare Earth Metals and Why They’re Important in the Trade War:
Rare earth metals are a group of 17 elements commonly used in production in many industries, including renewable energy technology, oil processing, and electronics. Despite the title of "rare", they are abundant in the Earth's crust, according to the US Geological Survey. However, due to difficult extraction and potential environmental consequences of processing these metals, there are relatively few places in the world that mine or produce them. One country makes up more than 70% of the world’s global output for rare earth metals: China.
This past week, the editor of Chinese state-run Global Times tweeted, "China is seriously considering restricting rare earth exports to the US.” This would not be the first instance of China restricting its rare earth metal exports. As recently as 2010, they did it against Japan, over a territorial dispute. The US is somewhat reliant on importing rare earth metals from China, as other countries simply do not produce or process the quantities needed by the US. About 80% of the US’ rare earth metal imports come from China. Domestic mining doesn’t appear to be a viable option either as the one rare earth mine operating in the United States sends its ore to China for processing - and is already facing a 25% import tariff. Creating Enough domestic mines and processing facilities will take many years and will not help in the short term. The restriction of exports to the United States, if enforced, could have a major impact on major US industries (worth trillions of dollars) that rely on rare earth metals.
Greek Fire, essentially a primitive form of Napalm, originated in Greece, but was used to great effect in naval battles during the Byzantine Empire. This was because it could not only float on top of the water but was also difficult to extinguish by using water. The secrets of Manufacture and deployment were so closely guarded that even today we are unsure how it functioned. While the Formula has been the predominant area of study, it is thought that the storage / Pressurized delivery system played a huge role in its ignition and functionality.
There is very little that can be verified about the flexible glass or ‘vitrium flexile’ allegedly created during Tiberius Caesar’s reign of the Roman Empire, however there are very interesting historical anecdotes that may lend credibility to this tale.
These stories depict a glassmaker who presented a glass vessel (what this vessel is varies in the stories) to the Emperor who inspected it. He returned it to the glassmaker, who promptly threw it down on the ground. The glassmaker calmly picked it up and shows the Emperor a dent in the glass rather than broken pieces. The Glassmaker then proceeded to hammer it back to its original shape and it appears as though no damage occurred to his work.
Now you would think this creation would be rewarded, however fearing that this new material would devalue gold, silver, and other precious metals the Emperor ensured no one else knew the formula for ‘vitrium flexile’ and then dispatched with the poor glassmaker’s head.
While seemingly impossible, it appears there may be some plausibility to this story. According to speculations, If the Roman glassmaker had somehow obtained boric acid or borax (both of which are naturally occurring materials), the ending product would be relatively “unbreakable”.
This term is used nowadays for a wide variety of pattern welded forged steel products, however historically speaking Damascus steel was discovered long ago and was used to make swords in the middle east. Stories allege that these swords could cut through rocks or could even completely shear another blade, but what made this steel so special? The exact process they used is still unclear, however wootz steel was imported from Sri Lanka and used in the forging process with other metals to “weave” them together rather than creating an alloy. This process created an incredibly strong but flexible metal that modern day smiths have struggled to recreate. While modern day Damascus is generally high quality and quite beautiful, it is only an approximation of its former glory.
Apollo/Gemini Space Program Technology
While not truly “lost”, the Apollo and Gemini space programs leave many modern scientists scratching their heads. Few schematics or records were kept of the original programs due to the increasing pressure of the space race, and as a result almost every program was rushed to completion and included private contractors who took any records that did have with them on completion. While this wasn’t a problem for several years, researchers with little else to go on have started to reverse engineer older components to determine how they worked as well as they did.
This lost genus of the fennel plant was used in Roman times as a form of birth control as well as a cure all for common ailments. This plant grew only along what is now the coast on modern day Libya. It very quickly became one of the most valuable materials in the ancient world and was not only widely used but was also displayed on several variations of their currency.
It is speculated that with this plant only growing in a small portion of the world and the increasing demand, it was likely overharvested and driven to extinction.
These violins and other stringed instruments created by the Stradivari Family were prized in their day, circa 1650-1750, but are renowned in modern day as having an unparalleled sound quality that in impossible to recreate. Most of these surviving instruments are worth hundreds of thousands of dollars but experts still disagree what makes them sound so beautiful. It is speculated that a fungus that grew in the region, or perhaps the density of the wood accounts for their beauty but no one can say for sure.
The family art was only known by Antonio Stradivari and his sons, Omobono and Francesco. The family secret was lost with them after they passed away.
The Greeks were much more advanced than other civilizations of their time. One area they were highly regarded in was the field of medicine. They were said to treat those in mourning with Nepenthe, an anti-depressant known to “chase away sorrow.” The plant is frequently mentioned in Greek literature, like Homer’s the Odyssey, so some historians claim that it could be fictional. Others believe that it was real and widely used in ancient Greece. It was said that Nepenthe originated in Egypt and its effects have led many to compare it to opium or laudanum as “a drug of forgetfulness.” It’s possible that this plant is still around today but modern science hasn’t identified its modern equivalent so for now it remains a mystery.
Have you noticed the road that was fixed last year falling apart already? Or perhaps that old crumbly concrete building waiting for demolition? Why is it that our modern concrete falls apart within a century but Roman Concrete has stood over a millennium? The biggest difference is with the chemical composition.
Roman concrete contained high levels of volcanic rock and lime, and when seawater was introduced it would cause a reaction between the ingredients and form an incredibly strong bond. Our modern Portland cement does not contain this mixture and has a service life of about 50 years, quite often less if exposed to seawater.
To add to injury, it appears as though the “Roman Method” for making concrete is far more environmentally sustainable and would release less carbon dioxide into the air annually. The more you know.
Invented in 1986 by Maurice Ward, Starlite was a special plastic that could withstand over 10,000°C and would not release toxic gases or smoke. While the exact formula was taken to his grave, this substance was based on a combination of approximately 21 polymers and copolymers with added ceramics. Allegedly its strength and durability also increased when under stress.
This substance appeared in BBC’s Tomorrows World in 1990 where an egg was coated in the substance and blasted with a 1200° torch. Not only Did Starlite protect the egg, but the internal temperature never rose about 35°C and the egg was still raw.
Not even High-powered lasers OR simulated nuclear flashes could destroy the material and very quickly the inventor had investors calling him to try to capitalize on his invention.
Worried that this material would end up in the wrong hands, Mr.Ward was adamant that he would maintain a 51% control of the projects and wanted to make sure that no one could reverse engineer Starlite. Ward passed away in 2011, with no agreements being made. Starlite may be lost to the world, however Ward alleged that some of his immediate family knew the recipe so there is always the chance we will see large scale use of the material in the future.
Mithridatium, named for King Mithridates VI, was an alleged “universal antidote” to all poisons. Though the exact formula has been lost to time, historians believe it included opium, chopped vipers, and small amounts of both poisons and their antidotes. The antidote was developed around 100 B.C. and used for many centuries, especially in Italy and France. It was even used not long ago in 19th century under the name “theriac”. Today, the recipe is unknown but there have been documented attempts to recreate the formula to this miracle antidote as recently as the 1990s.
Sloot Coding System
In the mid to late 90’s a Dutch electronics engineer devised a data storage method that could hold a full length film in 8 kilobytes of data (.008Mb or .000008GB). Most modern techniques still require much more data to store a regular movie, HD films even more. Despite the “impossibility” of this system it quickly attracted investors and Jan Sloot, the inventor, presented his system to Roel Pieper from Phillips. Later that year Pieper left Phillips to join Sloot’s Company.
Unfortunately, just days before Sloot was to release the source code, he was found dead in his garden from an apparent heart attack.
While tragic, this would not have stopped the investors from perusing the technology. There was just one small problem… A key piece of the project was housed on a floppy disk in Sloot’s Possession and after his death they were never able to recover it. (Despite searching for months)
Wilhelm Reich’s Cloudbuster
In the 1950’s William Reich created a pseudoscientific device called a “Cloudbuster”. This device allegedly manipulated an energy called “orgone energy” to affect the atmosphere and change weather patterns. Allegedly, this device was used on a farm in 1953 and was proven to work when it called down rain.
Research has led me to believe that that event of 1953 was more than likely a coincidence, but there have been reports of modern “Cloudbusters” being made with some very severe consequences for the individual at least, if not the surrounding community.
The “orgone energy” was also used to create devices for medicinal use, however the FDA decided it served no medical purpose and more than likely provided a placebo effect after interviewing physicians for years. A professor from the University of Oregon informed the FDA Inspector interviewing him that he knew the device was phony, however he did find it useful because his wife would sit in the booth quietly for hours a day. Guess it was good for something after all? In March of 1954 the FDA ordered that all accumulators, parts and instructions be destroyed as well as several of Reich’s books containing references to orgone energy being withheld.
Tesla’s Wardenclyffe Tower
Now that it is 2019, we have some “futuristic” technologies like hoverboards and wireless charging, however wireless energy was conceived and attempted around the turn of the 20th century by Nikola Tesla.
Tesla created many new inventions, but his largest dream was wireless power. After successfully transmitted energy wirelessly over small distances in his lab, he was ready to attempt his “World Wireless System”. He started work on his towers in Colorado Springs around 1899-1900 and started numerous tests to prove and refine his hypothesis.
While many of Tesla’s test were “successful”, it appears that confirmation bias played a huge role in how he performed his research and very little was done to rule out any other explanations for his data.
Even without the typical proof of concept, J.P. Morgan himself invested over $150,000 to help Tesla construct the Wardenclyffe tower in New York. Although, Tesla presented the tower as a radio project to beat Marconi broadcasting across the Atlantic, rather than just the “wireless energy transmitter” he originally planned to make. By 1901, Tesla was living large and expecting great success from his project, however on December 12th, 1901 Marconi was successful in transmitting a signal across the Atlantic Ocean and was forever cemented in history as the father of modern radio.
Naturally, this outcome was not what Tesla had promised J.P. Morgan and as a result the Tycoon refused to invest any more into the tower. Tesla spent years trying to obtain funding to finish his tower, but as time went on the probability of completion became less and less. This among other factors led to Tesla’s later depression and overall decline leaving him essentially homeless and broke at the end of his life.
While we will never know what the outcome may have been if only Tesla’s Investors had done more to help, however based on modern electrical engineering and science it appears as though Tesla was destined for failure as far as the “World Wireless System” was concerned. However, his ability to wirelessly power light bulbs and other devices short distances is something we still cannot replicate or implement in an economic way today. There is always the potential that Tesla had discovered some aspect of wireless energy that was taken to his grave, but more than likely his inability to properly scale the transmission to a larger distance led to his eventual decline.
Nikola Tesla’s Patent
While Wireless Energy was Tesla’s “Magnum Opus”, he created several other fantastic and useful inventions during his lifetime. From the Brushless AC Motor, to actual live demonstrations of wireless energy transfer in his lab environment. However one of his less well-known patents references something that may seem very familiar and has exploded in popularity in recent years. While not explicitly called a “drone”, Tesla devised Unmanned vehicles and patented the idea for the “method of and apparatus for controlling mechanism of moving vessels or vehicles” in November of 1898. Tesla envisioned this device being powered by electrical waves and although he did not mention them by name, he was in fact correct about the use of radio waves for wireless controls.
Tesla Believed in the destructive potential for unmanned vehicles and in his patent mentioned, “… for by reason of its certain and unlimited destructiveness it will tend to bring about and maintain permanent peace among nations.”
The first “war drone”, Kettering Bug, was created during World War 1, however it was unreliable at best and completed too late to ever see a war zone. The destructive potential Tesla referenced was not realized for nearly another century and is only just now being used in that capacity for warfare and peacekeeping. Turns out a much more terrifying and destructive weapon was enough to keep the superpowers from squabbling amongst themselves, and it was not Tesla’s design. The Manhattan project’s child, The Atomic Bomb.
The Antikythera Mechanism
One of the most enigmatic artifacts in history is the Antikythera Mechanism, a bronze device that was discovered by divers off the coast of the Greek island of Antikythera in the early 1900s. The machine is made up of over 30 gears, cranks, and dials that could be manipulated in order to chart the astronomical positions of the sun, moon, and other planets. The device has been dated as far back as the first or second century BC. No one knows the true purpose of this machine but it’s intricate and advanced design has lead to a lot of speculation over the years . Generally historians seem to agree that the Antikythera Mechanism was a kind of primitive clock that could calculate lunar phases and solar years, with many referring to it as the earliest “analog computer.”
The Pyramids of Egypt
Erected during Egypt’s Old Kingdom, the pyramids of Giza may seem like they’re just extravagant tombs but they’re also one of historians’ best resources for understanding life in ancient Egypt. Inside the walls are covered with illustrations of agricultural practices, city life, and religious ceremonies. However, there is one mystery that the pyramids don’t explain; how they were built.
It has remained a mystery to historians for thousands of years, but the work of several archaeologists over the last few decades has provided immense insight into just how the pyramids came to be.
Part of what has caused so much intrigue was the Egyptian’s ability to create the pyramid while having not yet discovered the wheel. Transporting the massive stones used to build the pyramids — some weighing as much as 90 tons — had to have been massively difficult. They hadn’t invented the pulley, an apparatus that would have made it easier to lift those large stones into place. They also didn’t have iron tools to chisel and shape their stonework.
Yet Khufu, the largest of the Giza pyramids, was started in 2,550 BCE and is 481 feet of immense, magnificent masonry. It and its neighboring tombs have survived 4,500 years of wars and weathering from nature— and their measurements are incredibly accurate—within a fraction of an inch.
What’s more, many historians are convinced that the building materials for the pyramids came from nearly 500 miles away.
Some researchers have theorized that the Egyptians rolled their stones across the desert. They may have lacked the modern wheel as we think of it today, they might have made use of large logs side to side along the ground. If they lifted their blocks onto those logs, they could successfully roll them across the desert. Unfortunately, there isn’t evidence that the Egyptians did this, as ingenious as it would have been: there are no descriptions of stones — or anything else — being rolled this way in Egyptian art or writings.
Then there’s the challenge of how to lift the stones into position on an increasingly tall pyramid. Ancient Greek historians born after the pyramids’ construction believed the Egyptians built scaffolding-like ramps along the outside of the tombs and carried stones up that way, while some modern historians have pointed to strange air pockets that suggest that the ramps may have actually been inside the walls of the pyramids, which is why no sign of them remains on the exterior.
Two new discoveries about how the pyramids were built have recently come to light. The first found when a Dutch team looked at Egyptian art depicting laborers moving enormous stones on sledges through the desert. They realized that the figure pouring water in the stone’s path wasn’t part of any ceremonial offering — he was wetting the sand. Water helps the grains of sand stick together to drastically reduce friction. The team built a replica of the sledges and tested their theory. They discovered that Egyptians might have been able to haul stones larger than archeologists and historians ever imagined.
Egyptian expert Mark Lehner also has made a theory about how the pyramids were built. Though today the pyramids sit in the middle of a vast desert, in the days of the pyramids they were surrounded by the floodplains of the Nile River. Lehner hypothesizes that if you could look below the city of Cairo, you would find ancient waterways that channeled the Nile’s water to the site of the pyramids’ construction. The Egyptians could have loaded the stones onto boats and transported them on the river right to the building site. Best of all, there’s proof: his excavations revealed an ancient port right by the pyramids where the stones could have landed.
A notable discovery was that of Pierre Tallet, an archaeologist who in 2013 exhumed the papyrus journal of a man named Merer who appears to have been a bureaucrat charged with transporting materials to Giza. After several years of translation, Tallet found Merer had written descriptions of his experiences overseeing a team of 40 workmen who opened dikes to divert water from the Nile into man-made canals that led straight to the pyramids.
He recorded his travels with several huge limestone blocks from Tura to Giza. His writings offered the most direct insight there’s ever been into how the pyramids were built, helping to answer one of history’s biggest questions.
With all the technological advancements we’ve made in today’s world it’s hard to imagine life without them. Part of why the mystery of the construction of the Egyptian pyramids intrigues so many is that it seems to be truly ahead of it’s time. If they could create such enormous and captivating structures without even the use of the wheel, then what can we create with our abundant innovations of the modern age? And what could we accomplish if we finally find out what tools and methods the Egyptians used that have been lost to time? With every breakthrough and discovery, we get closer to answering these questions.
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While our focus since 1986 has been primarily flanges for petrochemical, water works, and other standard industrial applications, we at Texas Flange also supply flanges to customers with unique requirements and/or who require non-specification flanges for diverse projects.
Texas Flange provides custom pipe fittings and industrial flanges to clients on a daily basis. We offer custom and non-spec flanges to customers in Canada, Mexico, South America, as well as to clients in Europe, Asia, Africa, and the Middle East.
However, for commonly produced or proprietary parts designed for other industries, we do recommend that you speak to distributors with more familiarity with these particular types of flanges. For example, if you are in the automotive industry, bath/kitchen remodeling and installation, looking for replacement parts for consumer goods, or any other industry with parts designed and provided by specific companies, we recommend speaking with those distributors who can better assist you in finding the parts you need.
For those customers who require flanges that are within an existing industry specification, such as ANSI / ASME / API / DIN / JIS ETC..., we are more than happy to provide what you are looking for. Depending on the pressure class & nominal pipe size (among other variables), we likely have what you need in stock!
If you cannot find your flanges through one of these channels, send us your technical drawing, along with your required dimensions, and we will review it for you. We have or can make the flanges you need!
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This month, rather than boring you all with minor changes in statistics, I shall bring some current events to your attention, if they are not already on your radar.
Locally speaking, there has been a bit of a bidding war for Anadarko Petroleum between Chevron and a relatively “small” oil company called Occidental Petroleum. To put it into perspective, data suggests that Occidental is approximately 1/4th the size of Chevron but has offered $76 Per share (Or $57 BILLION dollars) compared to the $65 per share (Or $50 BILLION dollars) offered by Chevron. According to analysts, Anadrako shareholders would prefer to hold Chevron stock, but Occidental currently claims that they are better suited and can get the “best results” from the Anadarko wells residing in the Permian Basin. Based on some data from Occidentals CEO, Vicki Hollub, Occidental’s oil wells in the Delaware Basin perform about 74% better than Anadarko’s. Hollub also noted that out of the top 100 wells in the Permian, 23 were drilled by Occidental. However, rivals on that list used ~27% more proppant per well to frack the shale formations. This difference in materials used equates to roughly half a million dollars in savings per well drilled by Occidental compared to their rivals. Ultimately, Chevron has the capital to outbid Occidental if they so choose, but we can expect they will have to pay the price to come out on top when its all said and done.
Anadarko Petroleum Update 04/29/2019:
“Anadarko is resuming its earlier negotiations with Occidental because Anadarko's board of directors, following consultation with its financial and legal advisors, has unanimously determined that the Occidental Proposal could reasonably be expected to result in a "Superior Proposal" as defined in the Chevron Merger Agreement. The Occidental Proposal reflects significant improvement with respect to indicative value, terms and conditions, and closing certainty as compared to any previous proposal Occidental made to Anadarko.”
Anadarko Petroleum Update 05/10/2019:
Anadarko Petroleum announced their entrance into a merger agreement with Occidental Petroleum Corporation under which Occidental will acquire all of the outstanding shares of Anadarko for consideration consisting of $59.00 in cash and 0.2934 of a share of Occidental common stock per share of Anadarko common stock.
Anadarko also announced that prior to the Occidental merger, the company terminated the previous agreement with Chevron resulting in a billion dollar termination fee.
The transaction is expected to close late this year, subject to approval by Anadarko shareholders, approvals closing conditions.
To read the update from the Anadarko Website:
Internationally speaking, there are a couple other things that are worth noting today.
Iraq is speculated to be one of the top oil producing countries by 2030, outpaced only by the United States, Saudi Arabia and Russia. While Iraq’s oil production has nearly doubled in the last decade, they certainly have some hurdles to overcome before that projection becomes reality. A major hurdle will be increasing water production to keep up with the demand from the energy sector. Additionally, while the potential for natural gas has increased with their oil production, currently Iraq is not equipped well enough to capture and process the current output. This has led to a deficit in natural gas and has led to importing large amounts from Iran to meet their power demands. This has led to many issues keeping the lights and air conditioning on during peak seasonal demand. There are many solutions being suggested to alleviate these issues, however we will have to check back in the future to see what progress has been made.
Finally, Let’s talk about Saudi Aramco’s Ghawar field for a moment.
For decades, exact metrics on the Ghawar Field have been closely guarded leading to unbridled speculation, however we finally have some numbers to look at and… they may not be as good as previously thought. While the Ghawar Field has been revered as almost “mythical” based on its size and vague understanding of its inner workings, recent data suggest it cannot produce the 5 million barrels per day that was previously thought, and in fact only produces 3.8 Million barrels per day. With this field being the largest source of crude in Saudi Arabia, it certainly stands out the most in their report. However the fact remains that Aramco is the world’s most profitable company (Earning ~$111 Billion Dollars last year) and unless error is compounded many times over and/or they are not able to successfully transition to include a more diverse portfolio of energy related products in the coming years, Aramco shows no signs of slowing down or fading away.
if you havent already, Check out last months report!
Stay tuned for our May Oil Report!