The public debate on fossil fuel emissions is often based on unfounded assumptions about where pollution originates. A recent report from the Climate Accountability Institute, featuring research by Richard Heede of Climate Mitigation Services, is injecting some new facts into the debate, and some of them are surprising. Continue reading…
If you like the higher premiums and deductibles that many astonished Americans are discovering come with the implementation of the Affordable Care Act – a.k.a. Obamacare – you’ll absolutely love your power bill if/when the Obama Administration’s Europe-inspired energy policies ever take effect. Continue reading…
There is little that conservatives dislike more than the budget deficit. Too bad then, that they overwhelmingly don’t believe that human activity has anything to do with the destabilization of the climate. Nor do they want to take any action to challenge the fossil fuel industries’ stranglehold on our energy supply.
A recent study by the Congressional Budget Office (CBO) found that among the 103 alternative actions studied as potential ways to reduce the deficit, the most effective by far would be the introduction of a carbon tax. Continue reading…
Beware the traveling salesman selling magic elixir from the trunk of his car.
Congress should have taken heed of that back in 2007 before they passed the Energy Independence and Security Act. Among other things, the EISA sent the nation’s corn farmers on an unprecedented and environmentally dubious planting binge. It also enticed some big upstream chemical companies into aggressive investments on ethanol production plants from which they now will be hard-pressed to produce a modest return. Continue reading…
With all the exciting developments on the renewable energy front, you could start to believe that we have truly begun to turn the corner on carbon emissions. It’s certainly true in some parts of the world.
Forty years ago, I was a 15-year-old, mostly B-team high school football player. Good thing, too. All the weightlifting I had to do came in handy when, more times than I can count, I had to push my mom’s gas-less Plymouth the last block or two of the waiting line at the one gas station in my hometown that remained open past noon most days.
The Arab Oil Embargo began in October 1973, when OPEC, then thoroughly dominated by Saudi Arabia, tried to punish America for supporting Israel in the Yom Kippur War against a coalition of Arab states led by Egypt and Syria (and financed largely by the Saudis). After 11 days of fighting, and a full week before the ceasefire came, OPEC banned oil exports from its member states to the U.S.
For those who were not yet born, or are too young to remember, the embargo eventually failed after six months – but not before it brought many Americans literally to their knees, pushing empty cars to gas pumps the way I had to push my mom’s car.
New Century, Same Story
Several key lessons were learned from the ’73 Arab Oil Embargo (besides figuring out the best spot on the rear of a car for pushing it). Of those, the most important one – never let this nation become heavily dependent on foreign energy – is the one to which the United States has given the most lip service, and the one to which we continue to pay the least heed.
Every president since Richard Nixon – and every serious but unsuccessful candidate for president in the past 40 years – has talked about the need for American energy independence. For that matter, just about every candidate for the House and Senate from every state in the Union has been firmly seated on to the American energy independence bandwagon. But despite all rhetoric, and despite what you might have heard and read about the current oil and energy boom in the United States, America is every bit as dependent on foreign oil imports as it was when I was pushing that dumb Plymouth toward the pump.
Before OPEC put the plug in the pipeline back in 1973, the United States got 35 percent of its oil from foreign sources. Sadly, that’s about the same percentage of oil that we are importing today.
Supply is More Diverse, But U.S. Still Vulnerable
True, a much bigger share of our imported oil today comes from non-Arab, and even non-OPEC nations, many of them, like Canada, Mexico, Venezuela, Brazil and others in the Americas. But even that imported oil is potentially a political/economic weapon that could be used, as the Arabs used their oil 40 years ago, against the United States.
Indeed, we’ve already experienced significant restrictions in the amount of oil being shipped to the United States from some of these nations in recent years (though the reduction in Venezuelan oil shipments to the U.S. is more the result of the economic and managerial incompetence the late Hugo Chavez’s regime than of his policies).
It’s decidedly less likely these days that any of those nations, or the Arab, African and Asian nations that produce oil will turn the spigot off for Americans. For all of the United States’ economic troubles, we are still the biggest oil demand market in the world. We’ve got lots of cash to spend on oil, and a great eagerness to do so.
That thirst contributes to our vulnerability. But it need not be so. We primarily are vulnerable because of our continuing – and largely unnecessary – dependence on foreign oil. Should oil exporting countries direct more of their production toward India, China, Indonesia and other Asian and Oceanic nations where oil thirst is expanding exponentially, the economic impact on average Americans and the U.S. economy would be particularly painful.
We already are paying about $1.20 a gallon more than we should be for gasoline. When the embargo began 40 years ago, the average price per gallon at U.S. pumps was just under 40 cents – or about $2.10 in today’s dollars. But instead of paying $2.10 a gallon, we’re paying about $3.30 a gallon today on average.
Yes, that $3.30 or so is way, way down from the nearly $4 a gallon average price we paid early this year. So I suppose I should be thankful for the reduction in pump pain. And I am. But what would be the impact on pump prices – as well as on food prices, family budgets, small businesses’ survival, tax revenues and so many other items if, say, a mere 25 percent of the oil we import today gets re-directed to other markets with little or no notice? What if half of that imported oil was suddenly unavailable to us?
More Domestic Production Would Help
Well, we could tell those exporting companies to go pound sand if the Keystone pipeline were built and pumping billions of barrels of tar sands and other unconventional hydrocarbons to U.S. refineries. And we could laugh at those exporting countries trying to inflict pain on us if, in fact, the U.S. was pumping conventional oil along with as tight liquids and gas aggressively out of the large and largely untapped formations beneath huge stretches of federal land in the western U.S. We could dismiss the petulance of such exporting nations if we were maximizing the nearly-untouched hydrocarbon productions available to us off much of our coastline.
Of course, Keystone isn’t even approved yet, let alone operating. And federal lands remain largely closed to oil and gas production, as do huge stretches of U.S. coastal waters. I am not predicting an imminent oil embargo against the U.S. But we haven’t taken all these reasonable – and environmentally respectful – steps that could eliminate our energy vulnerability and generate huge financial gains from increased exporting of North American oil and gas. So we remain just as vulnerable as we were 40 years ago to such actions, the probability of which is now rising.
Saudi Arabia recently made it crystal clear that it no longer trusts the U.S., at least under the current administration. The Saudis have been growing increasingly angry with Washington in recent years, and now the Obama Administration’s willingness to engage in nuclear energy/weapons control talks with Iran has pushed the U.S.-Saudi relationship to the breaking point.
Saudi Arabia views Iran as its archrival for dominance in the Middle East and among Muslin nations. And the Saudis fret that the U.S. and Europe will loosen or remove economic sanctions against Iran in exchange for vague promises that Iran won’t nuke Israel, or anyone else.
Meanwhile, political instability always renders South America and Africa unreliable sources of oil for the U.S. And Russia’ huge oil production is being soaked by its own needs and those China and the rest of Asia.
Forty years ago, Americans were wealthy and soft by comparison with most of the world. But they were tough, resourceful and unspoiled Spartans by comparison with spoiled, coddled, dependent Americans today. We made it through the ’73 Arab oil embargo by reining in our expectations, by working harder, by thinking smarter, by reordering our priorities, by changing our driving habits, by humorously grumbling a little bit, and, yes by sometimes pushing our cars to the pump.
I have hard time imagining many of today’s Americans putting up with such energy deprivation without crying to the government to do something. But while the federal government these days seems hell-bent on preventing any bit of difficulty from ever inconveniencing any of its otherwise helpless citizens, I somehow have a hard time seeing the feds rushing out to push our cars to the pump.
Let’s make no bones about it: The fossil fuel industry recognizes that major forces at play – namely the onset and rapid deployment of renewable and other alternative energy sources – pose an existential threat. This enormously powerful industry is using all the weapons at its disposal and battling on several fronts.
Most widely recognized is the industry’s effort to propagate doubt regarding humanity’s role in the warming of the planet. This is clearly intended to forestall meaningful action, both on the part of the government as well as by individual citizens.
As recently as this month, an opinion letter signed by 16 scientists was published in the Wall Street Journal and titled “No Need to Panic About Global Warming.” The article was quickly recognized as “an amateurish collection of falsehoods and half truths” in many circles. Several of the signatories were, in fact, closely tied to Exxon Mobil and other fossil-fuel interests.
The Journal letter states that, “perhaps the most inconvenient fact is the lack of global warming for well over 10 years now.” The authors apparently chose to ignore the truth that the past 10 years were, in fact, the hottest on record. These “scientists” apparently subscribe to some alternative version of reality that has become popular of late, which says that “anything said emphatically enough eventually becomes true,” at least in the mind of the person saying it.
The LA Times fired back with a statement saying that it will no longer publish Op-Ed letters denying a human effect on climate change – or for that matter taking other positions that are factually inaccurate. Editor Paul Thornton reiterated his position last week.
Less visible is the full-court press on natural gas, a feverish attempt to lock in millions of customers, ranging from households, to power plants, to automobiles to take advantage of temporarily low prices on “clean” natural gas. Yes, natural gas is cleaner than coal and gasoline, but it is still dirty, as are the methods being used to extract it from the ground.
Perhaps even more dangerous than its carbon impact is that potential economic impact of a natural gas bubble that is bound to pop. There is no denying the fact that there are huge reserves in certain parts of the country. But the difficulty and cost of extracting that gas has been understated as have the life expectancy of the wells, which are far shorter than traditional oil and gas wells.
Biofuels Also Under Attack
Finally, the industry has also gone on the attack against biofuels in general and the Renewable Fuel Standard (RFS) in particular. Most arguments focus the issue of food versus fuel, a tension exacerbated by last year’s Midwest drought and a resulting drop in the corn harvest.
In a press conference aimed at responding to attacks on the RFS, Renewable Fuels Association Resident Bob Dineen pointed out that this year’s crop is going to be a close to a record. Prices are going down and exports are going up. There should be no issue providing both feed and fuel.
In fact, both the Department of Agriculture and the United Nations’ Food and Agriculture Organization are saying that food inflation is very low across the globe. So the claims that ethanol and the RFS are driving up the price of food are belied by the facts on the ground, at least this year.
Further doubts being floated about cellulosic ethanol, a biofuel made from wood, grass and other inedibles also are being grossly exaggerated. Cellulosics are supposed to pick up a major portion of the ethanol being blended with gasoline. They’re late in arriving, and some pessimists think they never will.
In fact, commercial-scale production of cellulosic ethanol began this summer at the Ineos’ Indian River BioEnergy Center in Vero Beach, Fla. Ground also was broken this summer on the Adding Corn Ethanol (ACE) plant in Galva, Quad County, Iowa, which will convert corn kernel fiber into ethanol.
The EPA has adjusted the cellulosic volume requirements for 2014 down to 6 million gallons, allowing additional lead time for producers, demonstrating the flexibility of the mandate to respond to the realities of the marketplace.
Meanwhile, Demands for Alternative Fuels Goes Up
Meanwhile, demand for E85, (a blend of 85 percent ethanol, 15 percent gasoline) has gone up, illustrating that people are ready to embrace higher concentrations of ethanol as a vehicle fuel.
The next battleground will be over what is being called the blend wall. That refers to the amount of ethanol that can be blended into gasoline. That, of course, relates directly to a loss of sales for the oil companies.
There is no theoretical limit to how much ethanol can be used. In fact, many racing cars run quite well on pure ethanol. Today’s mainstream cars do contain some components, particularly pumps and seals containing rubber, that could be damaged by continual exposure to ethanol. EPA has now certified E15 (a 15 percent ethanol blend), though automakers will warranty this fuel only for their latest cars, which have been designed to accept it.
No doubt, this battle will continue as the ethanol percentage continues to advance against the forces of the petroleum industry, which will continue to counterattack with whatever new weapons it can muster.
In the mean time, the amount of oil being imported from overseas continues to decrease, year-over-year, as the result of more efficient cars, more domestic production and the blending of ethanol fuel into our national fleet.
Southerners today owe much to Willis Carrier.
Similarly, they – along with the rest of America – may soon come to hold George Mitchell in the same high regard.
Carrier invented modern air conditioning in 1902. Beginning in the 1950s, air conditioning became affordable and economically practical. It transformed the South from a sparsely populated agrarian backwater dominated by landed gentry (and worked mostly by impoverished descendants of both slaves and stubbornly self-reliant Scots-Irish immigrants) into a booming economic dynamo.
Today, the old South and the similarly hot southwestern states that together form the Sunbelt are home to nearly half of America’s 315 million people. The region continues to be the fastest-growing area for population, income, economic output, and political and cultural impact.
Mitchell passed away in July at the age of 94. He didn’t invent hydraulic fracturing or horizontal drilling, but he almost single-handedly drove the innovation that turned the two processes into the key breakthrough technology that is opening up huge new supplies of inexpensive, efficient and clean-burning natural gas.
A Change is Coming
Mitchell’s drilling technique is being incorrectly, unfairly and unwisely attacked by some environmentalists and the usual “not-in-my-backyard” crowd. Make no mistake; the shale gas that is being prodded to the surface by Mitchell’s innovative approach is creating the kind of energy self-sufficiency that, less than a decade ago, seemed a pointless pipe dream for Americans.
Now, beyond their energy self-sufficiency impact, fracking and horizontal drilling are beginning to have the kind of transformative economic, social, cultural and political impacts on the South – and, ironically, on the Northeast – that air conditioning did.
A new report from Bentek Energy, a division of the global energy information publisher and consultancy Platts, reveals that there’s been a stunning turnabout in the directional flow of the natural gas pipelines that, for the last 50 years, carried gas from the energy-rich South to the energy-dependent Northeast.
Today, more natural gas is flowing south out of places like Pennsylvania, where fracking and horizontal drilling have created a boom in the Marcellus and Utica Shale regions. It is headed south to the Gulf Coast region, where the industry is racing to take advantage of the combined benefits of cheap, plentiful natural gas and easy, inexpensive access to world markets via the South’s many efficient port facilities.
Indeed, the South last year became, for the first time ever, a “net demand” region in terms of the directional flow of natural gas.
More Funding, Trust Allocated to U.S. Natural Gas Production
The southward flow of gas is only getting started. More than one-third of the projected growth in U.S. natural gas production during the next ten years is expected to come from the Northeast.
Meanwhile, 62 percent of the recently announced $116 billion investments in major new industrial projects is taking place in the Southeast.
For example, Methanex, a Canadian company that is the world’s largest supplier of methane, is relocating two production plants from Chile to the U.S. Gulf Coast, primarily to take advantage of abundant, cheap, natural gas, much of it being pumped down from the Northeast. Additionally, nine liquefied natural gas projects are planned for the Southeast.
There’s a significant debate in Washington over whether the Obama Administration should approve up to 10 more new facilities that would export LNG (industrial users oppose granting more permits for such facilities because they fear increased exporting of LNG will drive up the price of natural gas paid by industrial users in this country.)
Whatever the outcome of that debate, it’s clear that technological innovation and advancement once again is dramatically changing the economic landscape of the south, and that such change almost certainly will trigger more – but unpredictable – social, cultural and political change in the region. This time, however, the South won’t be the only, or necessarily even the primary, beneficiary.
The Northeast, hammered economically by decades of industrial decline and desertion, and steady, significant population loss, is experiencing a boom in both energy-related employment and economic output. People from that region who have the trade skills and aptitudes to work in the energy sector won’t have to leave home to find work the way many members of the previous generation had to do.
Rocco Canonica, who led the team that authored Bentek Energy’s 10-year forward-looking report, says “the U.S. is embarking on a true sea change.” Not only has the South become a net demand market for natural gas, “the Northeast is poised to switch from the nation’s largest demand region to a new supply region.” In fact, there are now more than 40 Northeastern pipeline expansion projects in the works, and about half of them are being designed primarily to push natural gas southward, which is a 180-degree turnaround from past practice.
Innovation is Key
The good folks of Enterprise, AL, have erected a statue honoring the boll weevil, of all things. To outsiders it seems weird, but the people of Enterprise and Coffee County honor the pesky bug that nearly destroyed the town’s cotton-farming business in the early 20th century. Two men by the names of H.M. Sessions and C.W. Baston saw the threat as an opportunity and converted to farming peanuts. The change turned into a huge success, both for the two men and for farmers throughout the area. Eventually, cotton was grown again, but fields were rotated and crops diversified. Today, south Alabama celebrates the innovation that dramatically changed many lives for the better.
Maybe one day soon some other place down south – or maybe in Pennsylvania – will erect a statue to honor George Mitchell. They should put it right next to the statue of Willis Carrier.
When you have a hot product that people are buying lots of, you want to try and sell as much as you can while the getting is good. That is clearly the case with natural gas right now, which at historically low prices is enjoying unprecedented success.
No wonder then that suppliers are trying to whip up demand even further to lock in commitments to natural gas infrastructure before the bubble bursts and prices float back up to historic levels, which they will much sooner than most people expect.
That’s why we’re seeing events like the Penn State Natural Gas Utilization Conference, which brought industry and government officials together to try and find new ways to increase demand for natural gas, which, of course, Pennsylvania has in abundance right now. In fact, there is so much gas available in Pennsylvania right now, supply exceeds demand, which is a problem if you’re a producer. Continue reading…
A beloved and respected college professor in the late 1970s, who had split his time in the 1960s between covering the civil rights movement in the South and the Lyndon Johnson Whitehouse for the New York Times, regularly warned all of us would-be journalists against the devices of “all-knowing, all-seeing, but unseen editors in their ivory towers” seeking to influence policy with agenda-driven reporting.
“We’d get these cables from senior editors in New York,” my professor told us on more than one occasion, harkening back to the days when instructions to reporters in distant bureaus actually were transmitted by Western Union. “And they’d say something like ‘Editors have determined ‘this’ or ‘that’ to be true. Find Facts. Prove Same.’ Then we’d go out and, more often than not, be unable to find the evidence to support the editors’ position. But they wouldn’t listen to the reporters in the field. They knew better.”
Today, while some (perhaps many) news organizations still are driven, at least at times by that bias-laden approach, the tactic has taken even deeper, more sinister root at the intersection of policy and scientific research. The latest evidence is found deep inside the report issued recently by the United Nations’ Intergovernmental Panel on Climate Change. Continue reading…