Free Markets, Free People

Energy

Government cronyism in full bloom is the US west

Last month I pointed this out:

The Obama administration will open public lands in six Western states to more solar projects as part of a solar energy road map it publicized Tuesday.

The Interior Department set aside 285,000 acres in Arizona, California, Colorado, Nevada, New Mexico and Utah for the initiative. Firms can apply for waivers to develop projects on an additional 19 million acres.

At the same time the administration opens those lands up (19 million acres!?  For solar?), it has essentially closed federal land to oil and gas exploration and exploitation.

The Wall Street Journal (subscription) explains:

Several weeks ago in a remarkable but little-noticed policy directive, the Interior Department announced that it will allow construction permitting on 285,000 acres of public land in Arizona, California, Colorado, Nevada, New Mexico and Utah for solar energy projects. Even more remarkable, Interior said that energy firms can petition Interior to build solar installations "on approximately 19 million acres"—a larger land mass than Connecticut, Massachusetts, New Hampshire and Vermont combined.

Interior boasts that "this represents a major step forward in the permitting of utility-scale solar energy on public lands throughout the west." This means opening up huge chunks of U.S. desert and wilderness to the installation and long-term placement of hundreds of thousands of solar panels. The dirty secret of solar and wind power is that they are extremely land intensive, especially compared to coal mining, oil and gas drilling or building a nuclear power plant.

Question: Where are the environmentalists?  I can’t imagine anything more disruptive to “fragile eco-systems” and endangered species than carpeting hundreds of thousands or millions of acres with solar panels.  And yet I’m finding little to nothing in the press about their protests of projects of such a scale.

What’s surprising is that few if any nature groups are protesting this regulatory rush to approve renewable energy projects. Environmental groups have never hesitated to block a dam to save a snail darter, or oppose a forest-clearing to save an owl, but desert tortoises and bighorn sheep are apparently expendable as sacrifices to the gods of green energy. So much for protecting wildlife from big, bad profit-making industry.

Those groups are complicit in the cronyism and have abandoned their so-called calling (protecting the environment and wild life) for politics.  Like happened to the National Organization of Women during the Clinton years, the environmental movement’s complacency and silence regarding this move by the administration destroys their credibility.

Not only that:

That’s only part of the special treatment for solar companies. Interior says it plans to expedite solar-project approval and cut up-front costs for developers. The agency is also streamlining National Environmental Policy Act approval and facilitating the linking of solar electricity generation to transmission lines that will carry the electricity to substations. All of this is on top of the $9 billion in taxpayer handouts for solar and wind projects that were approved between 2009 and 2011.

In short, green energy is getting an EZ Pass through the Administration’s costly regulatory tolls. Since taking office in 2009, the Obama Administration has approved 17 major solar projects on public lands. All of this is facilitated through a program called the "roadmap for solar energy development."

Apparently the costly and lengthy environmental impact studies required of fossil fuel or nuclear projects just don’t need to be done by “approved” energy sources, even if it is clear that in terms of real environmental impact (just by footprint alone) these projects are far more intrusive than fossil fuel projects.

But hey, that’s where cronyism comes in.  That’s where we socialize (subsidize) the cost and privatize the profit.  That’s where the taxpayer pays the difference while the government streamlines its procedures (or doesn’t enforce its own regulations) in favor of its chosen industry.

Interior is just not going to entertain the same sort of nonsense it imposes on fossil fuel projects when it is a project it favors.

Oil shale though?  Oh, we have regulatory hoops, more hoops and requirements out the wazoo if you want to do that:

Meanwhile, the Institute for Energy Research notices that the new solar policy is "in sharp contrast to the Obama Administration’s canceling lease sales for oil shale deposits in Colorado, Wyoming and Utah early in the President’s term and significantly downsizing development plans for those resources since then."

This is roughly the same list of western states that got the green light for solar, but with different results. Oil shale—not to be confused with shale oil, which is extracted through hydraulic fracturing—is recovered by heating rock at high temperatures, which releases petroleum. The U.S. has the largest oil shale deposits in the world, totaling a little under one trillion recoverable barrels, or about 150 years worth of supply. But most of it is located on public lands and is still off limits.

Consider the 2005 Energy Policy Act that authorized oil shale leasing on public lands. In 2008 the Bush Administration issued rules on oil shale exploration, but in February 2009 Interior Secretary Ken Salazar said those rules would be delayed. Only this year, says Mary Hutzler, former acting administrator of the Energy Information Agency, "did the Interior Department announce its plan for shale drilling, but the administration closed off 75% of the federal land containing oil shale resources that were to be offered for lease under the Bush rules."

Remember the post from yesterday in which I pointed to the promise of fossil fuel if government would just get out of the way?  3.6 million jobs and a 3% increase in GDP by 2020.

Instead, this is the way this administration has chosen to go.  An unproven and land intensive energy source instead of backing a tried and true one.   Like it has done in the medical field it is wreaking havoc in the energy field pushing its favored industry that can only survive by government subsidy.

And this administration has the gall to call anyone else “ideologically” driven?

Really?

~McQ

Twitter: @McQandO

Facebook: QandO

Fossil fuel still the hope for the future

Let this paragraph, given the economic circumstances we now find ourselves in and the policies we’ve suffered under with this administration in reference to fossil fuels, sink in:

U.S. energy supplies have been transformed in less than a decade, driven by advances in technology, and the economic implications are only beginning to be understood. U.S. natural gas production will expand to a record this year and oil output swelled in July to its highest point since 1999. Citigroup estimated in a March report that a “reindustrialization” of America could add as many as 3.6 million jobs by 2020 and increase the gross domestic product by as much as 3 percent.

In case you missed those numbers, that’s plus 3.6 million jobs and kicking up the GDP by as much as 3% by 2020.

And imagine the tax revenues that would bring as well.

Low cost fossil fuel will also do much, much more:

[T]here are signs the economic gains have begun to expand beyond the oil and gas fields and that the promise of abundant, low-cost fuels will give a competitive edge to industries from steel, aluminum and automobiles to fertilizers and chemicals.

In other words, low cost fuels will make our manufacturing sector more competitive which means more of it and more jobs as well.  Right now (and for the foreseeable future) our natural gas is much less expensive than that in the UK and Europe.  And we have literally trillions of cubic feet of it that is recoverable.

That’s starting to drive some massive private investment:

Companies plan to invest $138 billion in more than 700 natural gas storage, pipeline and processing plants in the U.S., and another $88 billion in more than 500 gas-fired power generation units, according to Joseph Govreau, vice president and editor-in-chief of Industrial Info Resources. The

firm tracks projects from planning stages through construction.

That’s only a portion of what this will spur, if allowed to go ahead.  Fertilizer production, petrochemicals, etc., all could see a revival with cheap fossil fuel.

Democrats keeps saying that reviving the manufacturing sector should be a priority.

So here’s a valid means of doing so. 

Yet for 3 plus years, this administration has done everything it can to slow walk or block increased production and exploration on federal lands and off our coasts.   There’s no sign it plans on changing that.

This boom we’re talking about has taken place in a relatively very few areas, mostly privately owned:

So far, the economic benefits have been confined to states such as Louisiana, Texas and North Dakota, while the national jobless rate has stayed above 8 percent for 42 straight months in the wake of the worst recession in seven decades.

Seems like the proverbial “no brainer” doesn’t it?  Open up federal lands and let oil companies responsibly and in an environmentally safe way explore for and exploit the natural resources we have and the country is put in the position to reap the benefits:

“This is one of those rare opportunities that every country looks for and few ever get,” said Philip Verleger, a former director of the office of energy policy at the U.S. Treasury Department and founder of PKVerleger LLC, a consulting firm in Carbondale, Colorado. “This abundance of energy gives us an opportunity to rebuild our economy.”

Or we can repeat these past 3 plus years.

Your choice.

~McQ

Twitter: @McQandO

Facebook: QandO

Nevada’s epic “green energy” failure

Unfortunately these stories are all too common now:

As U.S. Senate Majority Leader Harry Reid prepares to host his fifth annual  National Clean Energy Summit on Aug. 7, a Nevada Journal examination of Nevada’s renewable energy sector shows that over $1.3 billion in federal funds funneled into geothermal, solar and wind projects since 2009 has yielded and is projected to yield just 288 permanent, full-time jobs.

That’s an initial cost of over $4.6 million per job.

So as the Senator from Nevada tries today to justify his profligacy in his home state at your expense via this sham “National Clean Energy Summit”, you can be assured of one thing – No one in government will be held accountable for this, at least not legally. 

The performance of many of these “sons of cronyism” is as dismal as the cost per job is outrageous.

Auditors for Nevada Geothermal Power, a federally subsidized green-energy firm in Nevada, are raising questions about whether that firm is going to fail.

As of last October, Nevada Geothermal Power had 22 employees in Nevada, and, according to the New York Times, had received $145 million in federal subsidies — composed of a loan guarantee of nearly $79 million for its Blue Mountain geothermal project and at least $66 million in grants to the company itself.

The Times called the company a “politically connected clean energy start-up that has relied heavily on an Obama administration loan guarantee,” and said it “… is now facing financial turmoil.”

Today, three quarters later, the latest company audit again questions the “company’s ability to continue as a going concern.”

The firm’s survival, wrote auditors on March 31, will depend “on its available cash and its ability to continue to raise funds….”

And that’s not the only example:

The most recent “clean energy” company failure in Nevada occurred three weeks ago when Amonix, a North Las Vegas solar manufacturing plant that had received more than $20 million in federal tax credits and grants, closed after only 14 months of operation.

Hailed upon its opening by Sen. Reid, U.S. Rep. Shelley Berkley and Gov. Brian Sandoval, the 214,000-square-foot Amonix facility had, at its height, employed some 700 individuals. In 2010, even President Barack Obama praised the Amonix plant, saying the “stimulus” tax credits it received had made an “extraordinary impact.”

Today, the company is bankrupt.

The result is something out of an Orwellian nightmare and the ultimate victim?  The people of Nevada:

In Nevada, consumer energy rates climb higher and higher. According to the Energy Information Administration (EIA), Nevada now has the highest residential electricity rates in the Intermountain West region.

Moreover, so long as present government policies — such as the state’s Renewable Portfolio Standard — remain in place, rates will continue upward.

While Sen. Reid helped Salazar fast-track government-approved renewable projects in 2009, he also used his influence as Senate majority leader to delay and ultimately kill a coal power plant planned for White Pine County.

Coal-powered plants produce electricity at a much lower price than do renewable-powered plants, according to the EIA and NV Energy.

Currently, NV Energy pays 3 to 5 cents per kilowatt-hour for natural gas and coal-fueled power, 8 to 10 cents per kWh for geothermal energy and for wind energy and 11 to 13 cents per kWh for solar photovoltaic energy. Wind and solar photovoltaic energy also require backup power for “intermittency issues.”

The higher costs from renewable-energy production are passed on to Nevada ratepayers in the form of residential electricity rates that are 26 percent higher than those of other Intermountain West states and 7 percent higher than the national average, says the EIA.

Obviously cronyism isn’t just limited to Democrats.  It’s just their turn in the barrel because their cronyism has been such a spectacular disaster here lately.

What none of our elected officials who regularly indulge in cronyism seem to understand is that they call certain things economic principles or economic laws for a reason – they aren’t something you can ignore and expect, for some reason, to be successful in ignoring them.

In this case Richard Epstein of the Hoover Institute again states why what is again being attempted, and failing, is a lesson that the government seems never to learn:

These subsidies programs have failed for mundane but compelling reasons. No government has ever succeeded in trying to shape industrial policy with state subsidies, for the simple reason that it has neither the knowledge nor the incentives to pick which fields make sense to invest in or which firms in these fields have latched onto a viable technology.

No government should, of course, ban investments in solar and wind energy, but the prudent strategy is to let these investments be made by venture capitalists and other entrepreneurs who might actually know what they are doing. And currently, the smart money seems to be steering clear of renewable energy technologies.

And yet we continue to see these sorts of attempts by government to do something it is entirely unequipped (and unneeded) to do.

You know, act like it has better information than … markets.  It never has, it never will.  The results are just about as predictable as sunrise.

Failure.  In some cases epic failure.

In the case of Nevada, government intrusion, at the cost of $1.3 billion of your dollars, has created a whopping 288 jobs and managed to quadruple energy costs for the state’s residents.

And yes, I put that in the epic failure column – but then we’re talking Harry Reid here, so one should be used to epic failure when his name is mentioned.

~McQ

Twitter: @McQandO

Taxes, energy, health care and spending–what we should be talking about

Pete DuPont does a little analysis of what should be major issues in the upcoming  election.  They don’t bode well for the current administration if, in fact, Republicans can get the media to actually pay attention and address them:

Taxes. Big tax hikes coming in January will serve as dampers on economic growth.ObamaCare imposes a new 3.8% tax on investment income. On top of that, if the Bush tax [rates] aren’t extended, the top income tax rates will rise to 23.8% from 15% on capital gains and to 43.4% from 15% on dividends.

But beyond the economic impact, the Obama administration’s focus on class warfare fuels the nation’s dissatisfaction and plays on an unwise resentment towards successful businesspeople. Mr. Obama continues to push for higher taxes and does so in a way that is an attack on those who are successful–demanding that higher-income taxpayers pay their "fair share," when they already pay more than that.

The economic impact shouldn’t be waved off.  When and if both capital gains and dividend incomes are taxed at a higher rate, they will effect both investment and retirement incomes.  Don’t forget those” rich folks” whose retirement income is structured to depend on dividends from blue chip stocks they’ve methodically bought in small quantities over their working years.  It obviously doesn’t matter that their incomes really don’t reach the “rich” threshold that the Democrats want you to envy, their retirement incomes will take an almost 200% tax increase hit regardless if the current rates aren’t extended.  Apparently to collect less than a trillion dollars over 10 years taxing the “rich” (so they’ll pay their “fair share”) vs. spending $46 trillion Democrats are happy to sacrifice those folks.

As for investments, there’ll be a recalculation given the increase on capital gains and it will dampen investments, thus business expansion and finally job growth.

Energy. The American people hear Mr. Obama talk about a broad energy strategy, but they see an administration that has attacked the coal industry with onerous regulations, done little or nothing to assist the natural gas boom, done what it can to slow down oil production, and wasted money on other initiatives that please green supporters but don’t lower the cost of energy.

This administration’s energy policy is a joke, but unfortunately it’s a very expensive joke.  Its priorities are completely backward, but purposefully so.  To call what they are doing a “policy” is simply absurd.  This is agenda fulfillment with the people’s money on pie-in-the-sky projects that have yet to yield (nor do they even promise to yield) the energy required to make them viable.  Meanwhile they’ve done everything humanly possible to retard the fossil fuel industry’s growth at a critical time for our economy.  On the issue of energy, this administration gets an F-.

Health care. Although ObamaCare remains unpopular, the Supreme Court ruling upholding it means that a 17% transfer of our economy from the marketplace to the control of the federal government is coming unless Congress and a President Romney can stop it. At a time when our nation needs lower taxes and more flexibility in health-care decisions, ObamaCare has increased taxes by hundreds of billions of dollars and allowed government to regulate most of our health care decisions.

The secretary of health and human services can now set rules that constrain doctors and hospitals and mandate prices. Mr. Obama once promised us all that if you were happy with your current health plan, you’d be able to keep it. The more we learn about ObamaCare, the unlikelier that looks–and the more the government will intrude in the relationship between doctor and patient.

Despite the disapproval of a majority of Americans, Democrats and this President rammed the legislation through anyway.  That should tell most Americans what they really think of their opinion.  It is a classic “we know what’s best for you” elitist move.

The second paragraph gives a hint though to the powers this legislation has given an unaccountable government bureaucrat.  The Secretary of HHS now has tremendous power to make unilateral decisions that will effect everyone’s health care.  Of course, that’s been discussed by some on the right, but for the most part the level of intrusion these powers will confer won’t really begin to be felt until, conveniently, after the election.

Finally:

Spending. Federal expenditures under Mr. Obama is both unparalleled and unsustainable. As National Review’s Jonah Goldberg notes, from the end of World War II until the end of the George W. Bush administration, federal spending never exceeded 23.5% of GDP, and the Bush years’ average was around 20%. The Obama spending rates have stayed above 23.5% in every year of his presidency. In the past four years, America has added $5 trillion in federal debt, and around $4 trillion of that was from Obama policies, according to The Wall Street Journal. Federal debt held by the public was 40.5% of gross domestic product in 2008. It’s now 74.2% and rising.

Despite the attempts by Democrats using fudged numbers and trying to spin it so Bush gets the blame, the spending by this administration is, as DuPont points out, “both unparalleled and unsustainable”.   And, don’t forget, the President hasn’t signed a budget in over 1,000 days because the Democratic Senate has refused to pass one, despite the Constitutional requirement it do so. 

Those are the things we ought to be talking about.  Not whether or not Romney pissed off the Palestinians (who doesn’t piss off the Palestinians when they take a principled stand on Israel?  How is this even news?).

These are where Obama’s skeleton’s are to be found.  He’d prefer to keep this closet door firmly closed.  The media, for the most part, seems content to help in that endeavor.

This election isn’t about anything but his administration’s abysmal record.  Spending time talking anything else is simply a distraction.  Unfortunately, given its unprecedented level of economic intrusion, we’re going to live or die economically with the policies that government applies.  Talking about whether a candidate may or may not have insulted the London Olympics isn’t going to change that fact one iota.  But it sure does distract from examining the previous administration’s record, doesn’t it?

~McQ

Twitter: @McQandO

The most underreported energy related story?

Did most of you know about this?

The U.S. Energy Information Administration’s (EIA) June energy report says that energy-related carbon dioxide fell to 5,473 million metric tons (MMT) in 2011.

That’s down from a high of 6,020 MMT in 2007, and only a little above 1995’s level of 5,314 MMT.

Better yet, emissions in the first quarter of 2012 fell at an even faster rate — down 7.5% from the first quarter of 2011 and 8.5% from the same time in 2010. If the rest of 2012 follows its first-quarter trend, we may see total energy-related carbon dioxide emissions drop to early-1990s levels.

Wow.  Victory for the enviro crowd, yes?  Regulation has succeeded, right?  The government has turned the tide?

Nope.  In fact it has nothing to do with the enviro crowd, government or regulation.

Two dirty words: Hydraulic fracking.  Two more for good measure: Natural gas.  And the dirtiest word of all: Markets.

Those three have combined, via a price point that has stimulated demand and made the conversion of coal plants economical to drive down emissions as they produce electricity more cheaply and efficiently.  This trend began in 2007 and is now having a real effect:

Increasingly, power plants are turning to natural gas because it has become abundant, and therefore cheap. And though technology is improving our ability to reduce emissions from coal usage, natural gas is still a much cleaner source.

Natural gas, given the extensive finds and the exploitation, is much cheaper than coal now.  In fact:

Indeed, natural gas has just passed an important milestone. As noted by John Hanger, energy expert and former secretary of the Pennsylvania Department of Environmental Protection: "As of April, gas tied coal at 32% of the electric power generation market, nearly ending coal’s 100-year reign on top of electricity markets."

That’s how it works in markets, or is supposed too.  The fact that emissions are down is an actual side benefit of the process.  And it is a process that has managed to work despite government and environmental groups like the Sierra Club’s interference or attempted interference in the process (the Sierra Club has declared war on natural gas and fracking after accepting millions in previous years from the natural gas industry). 

It is a part of the creative destruction of the capitalist process.  Coal will still have its uses, but just as it was replaced as a primary fuel for heating homes last century, it is now being replaced as a primary fuel for generating electricity for the same reason – there is a cheaper and more efficient fuel (which also happens to have fewer emissions) that is easier to produce and deliver than coal. 

At some point coal producers will either have to reinvent themselves or find something else to do.  And on the other side, opportunities will expand within the natural gas industry as more and more demand builds.

But shhhhh.  Don’t want anyone knowing this all happened because of markets.  Why that would hurt the argument that it requires government intrusion, regulation and the pressure of environmental groups to make things like this happen.

Can’t have that.

Forward.

~McQ

Twitter: @McQandO

Quote of the Day: Which Republican said this edition

Tell me if you know which Republican Congressman said this:

"President Obama and others in Washington need to realize that we cannot spend our way to prosperity and that to in order to create jobs," … "We need to address unfair trade deals that ship jobs overseas and enact policies that allow us to take advantage of our vast natural resources such as coal and natural gas in a safe and responsible manner which will lower energy costs and create jobs and approving the Keystone XL Pipeline would be a good first step."

House Speaker Boehner?  Paul Ryan?  Eric Cantor?

Uh, no … it wasn’t a Republican at all.  It was Rep. Mark Critz, D-PA.  The  guy who represents most of John Murtha’s old district.  Does this sound like a guy who is wanting the president anywhere near his district as he runs for re-election?

Meanwhile the President gave a “major speech” yesterday in Ohio that was 54 minutes long and could be boiled down into one sentence – No change: more spending, more taxes, same old failed economic policies and blame Bush.

It was widely panned by the usually supportive media.  Said Jon Healy of the LA Times:

President Obama’s much-anticipated speech Thursday on the economy didn’t lay out any new initiatives or make any new arguments. It often sounded like a recap of his first three years, or another version of the familiar "how we got here" blamefest.

Meanwhile, going back to part of Rep. Critz criticism, the Keystone XL pipeline, something which would mean jobs for this country and a big step toward increasing our energy security, is indeed proceeding – toward China or elsewhere:

While Joe Oliver, Canada’s minister of natural resources, said in an interview that the United States would remain Canada’s “most important customer,” billions of barrels of oil that would have been refined and used in the United States are now poised to head elsewhere. Expansion of Canada’s fast-growing oil-sands industry will be restricted by the lack of pipeline capacity before the decade’s end, he said, which “adds to the urgency of building them so that the resources will not be stranded.”

Three new pipeline network proposals — two that call for heading west and the other east — have been put forward.

If ever there were a blunder of historic proportions, Obama’s petulant and politically motivated disapproval of the pipeline rank up in the top.

As John Sexton writes:

The scale of this blunder, which the President made ostensibly on environmental grounds, is compounded by the fact that there is no putting the genie back in the bottle. Once a new pipeline is built, Canada has no reason to return to selling its oil products solely to the U.S. at a reduced price. The decision not to approve Keystone XL makes Solyndra look like a stroke of genius.

Indeed.

Oh and finally, can anyone guess what was required to attend the President’s Ohio speech?

Yeah, that’s right – a photo ID.

~McQ

Twitter: @McQandO

Coal powered, er electric cars, not as efficient as EPA claims?

Why I’d be shocked, shocked I tell you if that was the case.

The tease:

The Green Machine is now exposing how the US Government can choose to create data that disobey the laws of thermodynamics so that the worthless government policy of favoring plug in vehicles over gas or diesel powered vehicles can be supported by the public. Yes the US EPA chooses to make 34.4% equal to 100%.

Hmmm … I’m hooked, let’s see why:

The EPA allows plug in vehicle makers to claim an equivalent miles per gallon (MPG) based on the electricity powering the cars motors being 100% efficient. This implies the electric power is generated at the power station with 100% efficiency, is transmitted and distributed through thousands of miles of lines without any loss, is converted from AC to DC without any loss, and the charge discharge efficiency of the batteries on the vehicle is also 100%. Of course the second law of thermodynamics tells us all of these claims are poppycock and that losses of real energy will occur in each step of the supply chain of getting power to the wheels of a vehicle powered with an electric motor.

So the 118 mpg equivalent that the EPA allows the Honda Fit is nonsense?  Tell me it ain’t so!

Well it is simple the US EPA uses a conversion factor of 33.7 kilowatt hours per gallon of gasoline to calculate the equivalent MPG of an electric vehicle.

Dr. Chu Chu of the Department of Entropy is instructing the EPA on thermodynamics in coming up with the 33.7 kwh per gallon. On a heating value of the fuel 33.7 kwh equals 114,984 BTUS which is indeed the lower heating value of gasoline. The fit needs 286 watt hours to travel a mile and the Green Machine agrees with this for the 2 cycle US EPA test with no heating, cooling or fast acceleration. Using this amount of energy per mile and the 33.7 kwh “contained” in a gallon of gas, the EPA calculates the Fit gets 118 MPG equivalent.

All of these calculations are in fact flawed as the generation of electricity, the transmission and distribution of electricity, the conversion of the AC electricity into DC electricity, and the charging and discharging of the vehicle batteries all have energy losses associated with these activities. The average efficiency of power generation is perhaps 42.5%, the transmission and distribution efficiency is perhaps 90%, the AC to DC conversion and the battery charge discharge efficiency is about 90%. Multiplying all these efficiencies one can calculate that the overall efficiency is 34.4% to get electric power from fuels at the power station into stored electrons within the plug in vehicle’s batteries.

On this basis the 118 MPG equivalent is 40.6 MPG actual for the Honda Fit which is not much of an improvement to the gasoline version of this vehicle that has an EPA rating of 35 MPG combined for city and highway driving.

Uh, that’s quite a little downgrade in performance, isn’t it?  Nothing like being 190% off, EPA.

However, I am glad to see the administration has finally taken the politics out of science and has “real” science again serving the public’s best interest.

~McQ

Twitter: @McQandO

The new fossil fuel reality

Myth: The US has only 2% of the world’s proven reserves.

Reality:

From Canada to Colombia to Brazil, oil and gas production in the Western Hemisphere is booming, with the United States emerging less dependent on supplies from an unstable Middle East. Central to the new energy equation is the United States itself, which has ramped up production and is now churning out 1.7 million more barrels of oil and liquid fuel per day than in 2005.

“There are new players and drivers in the world,” said Ruben Etcheverry, chief executive of Gas and Oil of Neuquen, a state-owned energy firm that is positioning itself to develop oil and gas fields here in Patagonia. “There is a new geopolitical shift, and those countries that never provided oil and gas can now do so. For the United States, there is a glimmer of the possibility of self-sufficiency.”

Or, as the article from which those two paragraphs are taken is entitled, “Center of gravity in oil world shifts to America”.

And, given recent finds, there’s more than a “glimmer of the possibility of self-sufficiency for the United States” there is a real possibility for self-sufficiency if a coherent energy policy is put together that exploits the reserves we have.

Currently the US imports 45% of its petroleum needs.  29% of all imports comes from Canada, 8% from Mexico.  Saudi Arabia supplies 14% Nigeria 10% and Venezuela 11%, with lesser suppliers picking up the rest.

Canada’s supplies of crude oil are going to continue to rise, from a current base of 4.3 million barrels a day to 6.6 million a day in 2035.  But the US is projected to see a big an increase as well.  From the current 10 million barrels of oil a day to 12.8 million in 2035.

But that’s the case only if we tap into it or are allowed to tap into it, much being found under land controlled by the federal government who has been anything but friendly to the idea here recently.

Production has risen strikingly fast in places such as the tar sands of Alberta, Canada, and the “tight” rock formations of North Dakota and Texas — basins with resources so hard to refine or reach that they were not considered economically viable until recently

Technology has made the recovery of these resources economically viable and they promise a abundant energy future.

Then, of course, there’s natural gas, something the US is blessed with in huge quantities as well.  It is a distinct possibility that the use of natural gas will increase markedly over the next few decades as it is applied to more and more uses traditionally the realm of other energy sources.  Part of that may come among auto and truck fleets.  If so, then it is more than a “glimmer of a possibility of self-sufficiency” we’re beginning to see.

It is a real possibility.

But only if we use it.  And, only if the government and radical environmentalists get out of the way.

One of those two problems can be helped this November.

Forward.

~McQ

Twitter: @McQandO

About the myth that the US only has 2% of the world’s proven oil reserves

With the following quote, which Anu K. Mittal, the GAO’s director of natural resources and environment provided in written testimony to Congress, forever kills the meme that we have only 2% of the world’s proven oil reserves:

“USGS estimates that the Green River Formation contains about 3 trillion barrels of oil, and about half of this may be recoverable, depending on available technology and economic conditions,” Mittal testified.

“The Rand Corporation, a nonprofit research organization, estimates that 30 to 60 percent of the oil shale in the Green River Formation can be recovered,” Mittal told the subcommittee. “At the midpoint of this estimate, almost half of the 3 trillion barrels of oil would be recoverable. This is an amount about equal to the entire world’s proven oil reserves.”

Of course the 2% myth has been useful to deny the viability of “drill, baby, drill”.  President Obama has used it repeatedly (and I have no doubt he will continue to do so because he seems to come from the school that thinks if they repeat something that is untrue enough times, well, it becomes true, or something).  The entire argument has centered around the premise, given the 2% figure, that even if we were to drill everything, we’d still be dependent on foreign oil.  And so, the logic then goes, since that is “true” then it would seem we should instead concentrate on alternate energies, especially clean and renewable energies, to displace fossil fuel use, decrease our foreign dependence and replace oil with those alternatives (even if they’re more costly).

Naturally, this works perfectly into a further claim that we’ll also save the planet from warming, increase net job growth by creating domestic green jobs and everyone will live happily ever after.

None of it is true.  Myth after myth has been shattered.  Global warming, despite James Hansen’s insistence, is simply not happening the way he and his alarmists claimed.  He continues to beat the same drum he was beating years ago as if nothing has disputed his initial theories.  Just last week he doubled down with a NY Times op/ed piece that barely yielded a yawn.

Should we be pursuing alternate and so-called “clean” energy sources?  Of course we should.  And we will as necessity and markets guide entrepreneurs.  But this myth that we must be a net oil importer forever and ever and can’t find ways to fully secure our own supply (i.e. not have to import oil from unfriendly or potentially unfriendly countries or be subject to their whims) is a myth.

That is, unless we don’t exploit this resource.  And remember, the estimate Mittal is talking about covers one area in the US.  We’re not talking off-shore, where most of the off-shore area  also holds vast amounts of oil but remains off-limits.  We’re talking right here on dry land.

The Green River formation is near where the state borders of Colorado, Utah and Wyoming come together.  The unfortunate aspect of that is most of the land is owned by the Federal government.  And, under this administration, anyone who has been following the energy policy of the administration knows that’s bad news for Americans.

“The federal government is in a unique position to influence the development of oil shale because nearly three-quarters of the oil shale within the Green River Formation lies beneath federal lands managed by the Department of the Interior’s (Interior) Bureau of Land Management (BLM),” she testified.

Again, with this administration, most know what that means.  If history is a guide, little if anything will be done to take advantage of this petroleum windfall by Mr. “All-Of-The-Above”.

Look at the Bakken oil fields and their impact in this down economy for an example of what Green River could mean in real terms.  Here’s blurb published today from a Billings, MT newspaper:

Thousands of workers chasing quick riches by flooding into the Bakken oil field have helped jump-start home sales in Billings.

And the wave is starting to make Billings houses harder to find — and more expensive.

Well-site geologist Joe Hallgren works under contract for SM Energy of Billings. He and his family live in Williston, N.D., the oil boom’s epicenter. But, they’re building a house in Billings and when it’s finished in July they’ll move here and Hallgren will commute to the oil patch.

“I’ve seen a few boom-bust cycles. This one is crazy,” he said. “We got to the point where, for our family, Billings is just going to be better for us.”

Last week, Bozeman resident Doug Pezoldt, who surveys land for local engineering firm Sanderson Stewart, and his wife started moving into their custom-built Billings home.

“Really, in one year’s time, the boom in the Bakken has increased the volume of work and we just need more people in Billings to support that,” Pezoldt said. “My wife and I just feel like Billings is where we want to make our home long term.”

That is the reality of Bakken and the potential of Green River in a very down economy.

Question: Do you think the administration will bother to take advantage of it?

Forward.

~McQ

Twitter: @McQandO

“All-of-the-above” energy policy doesn’t mean just adding “clean coal” to campaign energy web page

This guy is so obvious it amazes even me at times.

He loses 41% of the Democratic vote in the West Virginia primary to a Texas jailbird and suddenly he’s all for “clean coal.”  Does he really, honestly believe that now West Virginia will rally to his cause because he put “clean coal” on his campaign web site where it has been conspicuously absent prior to the primary?  This is “smartest guy in the room” stuff?

After coming under fire for its consistent hostility to the coal industry, the Obama campaign quietly adjusted its energy policy website to include “clean coal” among the president’s energy initiatives.

The energy policy page of BarackObama.com now includes a section for “clean coal,” claiming the stimulus package “invested substantially in carbon capture and sequestration research.”

But until recently, that page made no mention of coal. Its Google cache shows a section for “energy efficiency” where “clean coal” now appears.

The change comes mere days after Obama lost 41% of the vote in the Democratic primary in West Virginia – a state heavily reliant on the coal industry – to a convicted felon and current federal inmate.

The chairman of the WV Democratic Party blamed Obama’s poor showing on his stance on coal energy. “A lot of folks here have real frustration with this administration’s stance on coal and energy,” said state Democratic chairman Larry Puccio. “They are frustrated and they are upset, and they wanted to send Obama a message.”

Of course everyone who has followed how Obama operates knows very well he’ll say anything.  It is what he does (or doesn’t do) that matters.  Just like being “for” gay marriage.  That doesn’t mean he’ll do anything to make it happen. It is about how he calculates being “for” something will benefit him politically.  The same holds true for “clean coal”.

Should he win re-election, “clean coal” will be removed as quietly as it was inserted onto the campaign web page.

Forward.

~McQ

Twitter: @McQandO