EIN News says, "Greenpeace Stage 'Polar Bear' Protest at Cairn Energy Dozens of activists dressed as polar bears are protesting inside the headquarters of a Scottish firm involved in Arctic oil exploration. (bbc.co.uk)".
Kumi Naidoo is the Executive Director of Greenpeace International. He was born in South Africa and was instrumental in South Africa's liberation struggle. His experience is that of a political organizer with destruction of a society. He has no environmental background. Naidoo has a simple program. He preys on the compassion of Americans to send him money, which he then uses in a disguised environmental attempt to inhibit economic development. This latest episode is his action to stop oil production by Cairn Energy.
Greenpeace and Naidoo qualify as subversives.
Covers energy sources, economis of energy, fossil fuels, solar and wind, government and private programs
Monday, July 18, 2011
Thursday, July 14, 2011
Kill the Special Interest Subsidy for Natural Gas
T. Boone Pickens is trying to convince Congress to grant a $1 billion per year tax subsidy to a special-interest group involving natural gas for automotive use (C&E News, 7/2/2011, page 20). Congress seems to be listening. The House has submitted H.R. 1380, and the Senate said to be drafting a similar bill.
In the last election, we thought we had sent a strong message to Congress that government spending should be reduced. Presuming that Republicans would be more conservative on spending, we changed the composition of the House. However, we seem to have misjudged the situation. Is there some sort of "spending disease" that has now infected the new House members?
T. Boone Pickens' selling point is that this is a method by which we can reduce our dependence on OPEC oil. However the fact is that we do not need to be dependent on OPEC anymore. Substantial oil reserves have been discovered in the United States, including West Texas. Our only problem is government intervention in not allowing drilling permits for production. For example, the Department of Interior is now considering declaring the Desert Lizard an endangered species, which will eliminate the newly discovered West Texas oil reserves from being developed.
Large quantities of natural gas have also been discovered in the Marcellus Shale of the Northeast and in the Bakken Shale of North Dakota/Montana. With this probability of significantly larger production, the price of natural gas will naturally fall. This will make it automatically attractive for extended use in automobiles. That being the case, why do we need a $1 billion per year tax subsidy?
Both the House and the Senate need to reconsider what they doing from both Requirement and Government Expense Reduction points of view.
In the last election, we thought we had sent a strong message to Congress that government spending should be reduced. Presuming that Republicans would be more conservative on spending, we changed the composition of the House. However, we seem to have misjudged the situation. Is there some sort of "spending disease" that has now infected the new House members?
T. Boone Pickens' selling point is that this is a method by which we can reduce our dependence on OPEC oil. However the fact is that we do not need to be dependent on OPEC anymore. Substantial oil reserves have been discovered in the United States, including West Texas. Our only problem is government intervention in not allowing drilling permits for production. For example, the Department of Interior is now considering declaring the Desert Lizard an endangered species, which will eliminate the newly discovered West Texas oil reserves from being developed.
Large quantities of natural gas have also been discovered in the Marcellus Shale of the Northeast and in the Bakken Shale of North Dakota/Montana. With this probability of significantly larger production, the price of natural gas will naturally fall. This will make it automatically attractive for extended use in automobiles. That being the case, why do we need a $1 billion per year tax subsidy?
Both the House and the Senate need to reconsider what they doing from both Requirement and Government Expense Reduction points of view.
Wednesday, July 13, 2011
Claims of Projected Oil Shortage Are Likely Deceptive
EIN News says, "World Oil Demand to Strain Supply in 2012, IEA Reports World oil demand growth will accelerate next year, adding to the pressure on available supplies, the International Energy Agency said on Wednesday, contradicting a more conservative outlook from producer group OPEC. (reuters.com)".
EIA is an organization of 28 member countries. All of them are significant users of oil. Only the United States is a significant producer.
It is obviously an intention of the IEA to help its members with oil supplies by claiming projected shortages. This would presumably encourage oil producers to increase production.
There's no reason to dispute the claim that oil demand growth will increase, but the key to the deception lies in the use of the term "available supplies". This is very nebulous. There is lots of oil presently available, and OPEC could increase production at a moment's notice. More importantly, new reserves continue to be discovered and are actually available through advances in deep water drilling technology. In addition, new discoveries of natural gas deposits and fracturing techniques will allow natural gas to become a ready substitute for many applications that now use oil.
The bottom line is beware of the fear mongers. Always look skeptically at the "wolf" criers.
EIA is an organization of 28 member countries. All of them are significant users of oil. Only the United States is a significant producer.
It is obviously an intention of the IEA to help its members with oil supplies by claiming projected shortages. This would presumably encourage oil producers to increase production.
There's no reason to dispute the claim that oil demand growth will increase, but the key to the deception lies in the use of the term "available supplies". This is very nebulous. There is lots of oil presently available, and OPEC could increase production at a moment's notice. More importantly, new reserves continue to be discovered and are actually available through advances in deep water drilling technology. In addition, new discoveries of natural gas deposits and fracturing techniques will allow natural gas to become a ready substitute for many applications that now use oil.
The bottom line is beware of the fear mongers. Always look skeptically at the "wolf" criers.
Tuesday, July 12, 2011
Reply to Rep. Neugebauer on His Energy Policy
Randy,
I like your form letter below. You seem to have a clear understanding of our energy problems.
With your cosponsoring the several energy bills in the House, you're on the right track. However as I said in a previous communication, it's a long way from an approved House Bill to a final law. We need a more effective way to override or counteract the continuing negative Executive Orders of the President. Anything you can do through the Supreme Court?
One item I take exception to, in your form letter, is your accent on energy conservation. This is a defeatist attitude based on the presumption that energy is limited (particularly oil) and that we should make every effort to conservation. While almost anyone will agree that we don't want to waste anything, and that we can conceive of running out of oil, there is every reason to believe that this could be a long time in the future and that the development of subsequent technologies will serve as replacements. I think the proper attitude should be a more positive approach that the market demands now more gasoline at low prices, and the US government should not be an impediment to that development. Please see what you can do with that more positive approach.
ACS
-----Original Message-----
Sent: Tuesday, July 12, 2011 12:14 PM
To: 'Arthur Sucsy'
Thank you for contacting me about the cost energy. I appreciate knowing your views.
The American economy depends on a reliable supply of fossil fuels, and that isn’t going to change in the near future. At a time when consumers are paying $4 or more for a gallon of gasoline, Congress and the Administration should encourage domestic energy production to relieve prices at the pump. Unfortunately, President Obama’s moratorium on offshore drilling has killed thousands of jobs and drastically reduced production in one of the largest energy-producing regions in the United States. As a result of the moratorium and continued permitting delays, U.S. offshore oil production is expected to be down 13 percent in 2011. Producers will lose approximately 375,000 barrels of oil every day this year.
With soaring gas prices affecting every American family, it is imperative that we start increasing oil production here at home. I have cosponsored a number of bills that would accomplish this goal:
· H.R. 49, the American Energy Independence and Price Reduction Act, which would direct the Secretary of Interior to implement a competitive leasing program for oil and gas exploration and development in the Arctic National Wildlife Refuge (ANWR), and would authorize the Secretary to designate up to 45,000 acres of the Coastal Plain in Alaska as a Special Area where drilling is permitted;
· H.R. 840, the SECURE Act, which would allow pre-approved oil and gas permit holders to conduct all operations under the terms of the permit without further delay;
· H.R. 993, the Lease Extension and Secure Energy Act, which would extend certain Outer Continental Shelf (OCS) leases for oil and gas development.
· H.R. 1287, the 3-D, Domestic Jobs, Domestic Energy, and Deficit Reduction Act of 2011. This bill would start lease sales in the OCS, open ANWR for production in an environmentally sensitive way, expedite the development of America’s vast western oil shale resources, update and streamline the permitting process for energy leases and expedites environmental litigation, and compel the State Department to issue all permits necessary to move forward with the Keystone XL Pipeline Project, which would bring over a million barrels of oil a day from Canada’s oil sands and North Dakota’s Bakken formation to U.S. consumers.
I also cosponsored and voted in favor of H.R. 910, the Energy Tax Prevention Act, which passed the House by a vote of 255-172 on April 7, 2011. This bill would prevent the Environmental Protection Agency (EPA) from regulating greenhouse gas emissions (GHG) under the Clean Air Act. It would block the Agency’s attempt to extend an unprecedented level of control over vast sectors of the U.S. economy through unilateral regulation of GHGs, which amounts to a massive energy tax on all Americans.
Additionally, on May 5, 2011, I voted in favor of H.R. 1230, the Restarting American Offshore Leasing Now Act, which passed the House by a vote of 266-149. This bill would establish statutory deadlines that require the Secretary of Interior to conduct four lease sales originally established under the 2007-2012 five-year plan in the Gulf of Mexico and offshore Virginia. The original plan enacted under the Bush Administration included these lease sales, but they have been delayed or cancelled under the Obama Administration. Specifically, the bill requires the Secretary to conduct proposed lease sales #216 in the Central Gulf of Mexico, #218 in the Western Gulf of Mexico, #220 on the Outer Continental Shelf off the shore of Virginia, and #222 in the Central Gulf of Mexico.
Without increasing domestic oil production, we stand little chance of easing prices at the pump. Instead of picking winners and losers in the energy sector and preventing producers from developing the resources we have readily available in the U.S., the Obama Administration should support policies that would lower the cost of gasoline, create jobs, and get our economy back on track.
However, the market for oil is extremely complex and the price of gasoline is dependent on a wide variety of factors that are not entirely under our control. While increasing domestic production will create additional supply that can lower energy prices, there is no immediate fix available to fully ease the burden of high gas prices that most Americans face. Prices at the pump in the United States rely heavily upon world oil supply and demand, geopolitical events, and investments in commodities futures. Global crude oil and liquid fuels consumption grew to record levels in 2010, reaching 86.7 million barrels per day. The Energy Information Agency expects this number to increase by 1.5 million barrels per day in 2011 and an additional 1.6 million barrels per day in 2012. Demand for oil is expected to continue to rise dramatically over the next few decades.
It is unlikely that increases in production will be able to match this growth in consumption for very long. If demand continues to outpace supply, prices will continue to rise. For this reason, energy efficiency and alternative technologies are a worthy goal. Unfortunately, most of the technologies that are readily available on the market today are either too expensive or not efficient enough for most consumers to justify purchasing. For example:
· Electric vehicles rely on heavy government subsidies and still end up costing more in the long run than an efficient gasoline-powered vehicle in the same class;
· Hybrid vehicles also have higher initial investments, but may make sense for consumers with certain driving habits;
· Research in hydrogen fuel technology has proven to be inefficient and dangerous, and is no longer considered a viable alternative to gasoline-powered vehicles by experts in the industry;
· Ethanol, which is cheaper per gallon than gasoline because of heavy government subsidies and tariffs, slightly buffers cost increases in crude oil;
· Natural gas may very well become a reliable fuel source upon which Americans can rely while alternative technologies are developed and perfected. Natural gas burns cleaner than oil and the relatively low cost may make it an attractive alternative to consumers.
Providing government subsidies to inefficient technologies can actually be counter-productive. By artificially creating lower prices for a product, the government is tricking the market to believe that the technology is cheap enough to survive competition. This removes the strong incentive for a company to make the product cheaper and more efficient. In fact, it can actually stifle innovation since the product can have relative success while becoming completely dependent on government aid. Instead of pretending that the technologies we have now can solve the energy problems of the future, we must let the market lead companies into developing more cost-effective options.
There is no silver bullet that is going to solve the energy problems we face today. Americans may want to consider consuming less in whatever way makes sense for them: purchasing more efficient vehicles, driving less, or using alternate modes of transportation. In these tough economic times, Americans and the federal government both must find way to do more with less. Energy consumption is no exception.
Please be assured that I will continue to work with my colleagues here in Congress to create sound and practical energy policies for the United
I like your form letter below. You seem to have a clear understanding of our energy problems.
With your cosponsoring the several energy bills in the House, you're on the right track. However as I said in a previous communication, it's a long way from an approved House Bill to a final law. We need a more effective way to override or counteract the continuing negative Executive Orders of the President. Anything you can do through the Supreme Court?
One item I take exception to, in your form letter, is your accent on energy conservation. This is a defeatist attitude based on the presumption that energy is limited (particularly oil) and that we should make every effort to conservation. While almost anyone will agree that we don't want to waste anything, and that we can conceive of running out of oil, there is every reason to believe that this could be a long time in the future and that the development of subsequent technologies will serve as replacements. I think the proper attitude should be a more positive approach that the market demands now more gasoline at low prices, and the US government should not be an impediment to that development. Please see what you can do with that more positive approach.
ACS
-----Original Message-----
Sent: Tuesday, July 12, 2011 12:14 PM
To: 'Arthur Sucsy'
Thank you for contacting me about the cost energy. I appreciate knowing your views.
The American economy depends on a reliable supply of fossil fuels, and that isn’t going to change in the near future. At a time when consumers are paying $4 or more for a gallon of gasoline, Congress and the Administration should encourage domestic energy production to relieve prices at the pump. Unfortunately, President Obama’s moratorium on offshore drilling has killed thousands of jobs and drastically reduced production in one of the largest energy-producing regions in the United States. As a result of the moratorium and continued permitting delays, U.S. offshore oil production is expected to be down 13 percent in 2011. Producers will lose approximately 375,000 barrels of oil every day this year.
With soaring gas prices affecting every American family, it is imperative that we start increasing oil production here at home. I have cosponsored a number of bills that would accomplish this goal:
· H.R. 49, the American Energy Independence and Price Reduction Act, which would direct the Secretary of Interior to implement a competitive leasing program for oil and gas exploration and development in the Arctic National Wildlife Refuge (ANWR), and would authorize the Secretary to designate up to 45,000 acres of the Coastal Plain in Alaska as a Special Area where drilling is permitted;
· H.R. 840, the SECURE Act, which would allow pre-approved oil and gas permit holders to conduct all operations under the terms of the permit without further delay;
· H.R. 993, the Lease Extension and Secure Energy Act, which would extend certain Outer Continental Shelf (OCS) leases for oil and gas development.
· H.R. 1287, the 3-D, Domestic Jobs, Domestic Energy, and Deficit Reduction Act of 2011. This bill would start lease sales in the OCS, open ANWR for production in an environmentally sensitive way, expedite the development of America’s vast western oil shale resources, update and streamline the permitting process for energy leases and expedites environmental litigation, and compel the State Department to issue all permits necessary to move forward with the Keystone XL Pipeline Project, which would bring over a million barrels of oil a day from Canada’s oil sands and North Dakota’s Bakken formation to U.S. consumers.
I also cosponsored and voted in favor of H.R. 910, the Energy Tax Prevention Act, which passed the House by a vote of 255-172 on April 7, 2011. This bill would prevent the Environmental Protection Agency (EPA) from regulating greenhouse gas emissions (GHG) under the Clean Air Act. It would block the Agency’s attempt to extend an unprecedented level of control over vast sectors of the U.S. economy through unilateral regulation of GHGs, which amounts to a massive energy tax on all Americans.
Additionally, on May 5, 2011, I voted in favor of H.R. 1230, the Restarting American Offshore Leasing Now Act, which passed the House by a vote of 266-149. This bill would establish statutory deadlines that require the Secretary of Interior to conduct four lease sales originally established under the 2007-2012 five-year plan in the Gulf of Mexico and offshore Virginia. The original plan enacted under the Bush Administration included these lease sales, but they have been delayed or cancelled under the Obama Administration. Specifically, the bill requires the Secretary to conduct proposed lease sales #216 in the Central Gulf of Mexico, #218 in the Western Gulf of Mexico, #220 on the Outer Continental Shelf off the shore of Virginia, and #222 in the Central Gulf of Mexico.
Without increasing domestic oil production, we stand little chance of easing prices at the pump. Instead of picking winners and losers in the energy sector and preventing producers from developing the resources we have readily available in the U.S., the Obama Administration should support policies that would lower the cost of gasoline, create jobs, and get our economy back on track.
However, the market for oil is extremely complex and the price of gasoline is dependent on a wide variety of factors that are not entirely under our control. While increasing domestic production will create additional supply that can lower energy prices, there is no immediate fix available to fully ease the burden of high gas prices that most Americans face. Prices at the pump in the United States rely heavily upon world oil supply and demand, geopolitical events, and investments in commodities futures. Global crude oil and liquid fuels consumption grew to record levels in 2010, reaching 86.7 million barrels per day. The Energy Information Agency expects this number to increase by 1.5 million barrels per day in 2011 and an additional 1.6 million barrels per day in 2012. Demand for oil is expected to continue to rise dramatically over the next few decades.
It is unlikely that increases in production will be able to match this growth in consumption for very long. If demand continues to outpace supply, prices will continue to rise. For this reason, energy efficiency and alternative technologies are a worthy goal. Unfortunately, most of the technologies that are readily available on the market today are either too expensive or not efficient enough for most consumers to justify purchasing. For example:
· Electric vehicles rely on heavy government subsidies and still end up costing more in the long run than an efficient gasoline-powered vehicle in the same class;
· Hybrid vehicles also have higher initial investments, but may make sense for consumers with certain driving habits;
· Research in hydrogen fuel technology has proven to be inefficient and dangerous, and is no longer considered a viable alternative to gasoline-powered vehicles by experts in the industry;
· Ethanol, which is cheaper per gallon than gasoline because of heavy government subsidies and tariffs, slightly buffers cost increases in crude oil;
· Natural gas may very well become a reliable fuel source upon which Americans can rely while alternative technologies are developed and perfected. Natural gas burns cleaner than oil and the relatively low cost may make it an attractive alternative to consumers.
Providing government subsidies to inefficient technologies can actually be counter-productive. By artificially creating lower prices for a product, the government is tricking the market to believe that the technology is cheap enough to survive competition. This removes the strong incentive for a company to make the product cheaper and more efficient. In fact, it can actually stifle innovation since the product can have relative success while becoming completely dependent on government aid. Instead of pretending that the technologies we have now can solve the energy problems of the future, we must let the market lead companies into developing more cost-effective options.
There is no silver bullet that is going to solve the energy problems we face today. Americans may want to consider consuming less in whatever way makes sense for them: purchasing more efficient vehicles, driving less, or using alternate modes of transportation. In these tough economic times, Americans and the federal government both must find way to do more with less. Energy consumption is no exception.
Please be assured that I will continue to work with my colleagues here in Congress to create sound and practical energy policies for the United
Big Risk on Natural Gas for Automotive Use
EIN News says, "Chesapeake Creating $1 Billion Fund to Boost Natural Gas Use in Transportation Chesapeake Energy Corp. is creating a $1 billion venture capital fund to boost demand for natural gas as a transportation fuel. Chesapeake will start advancing its plan by investing more than $300 million in two companies, including one owned by T. Boone Pickens. (newsok.com)".
Excellent news! This is the kind of thing that made America great. Private capital investing in a big idea. It's now a corporation versus the old-time individual greats, such as Rockefeller on railroads, Carnegie on steel, Ford on automobiles, Bell on telephones, but at least, it's not government. We can only hope that government will not meddle with it and screw it up by imposing impediments or supplying grants.
It's a risky business. The basic question is whether natural gas can compete with gasoline as an automotive fuel.
Natural gas usage has been around for many years as fuel for fleet taxis. It has generally been cheaper than gasoline, but is much less convenient to use. Gasoline is a liquid and can be contained in a relatively inexpensive on-board gasoline tank. Natural gas can only be handled as a liquid at very low temperatures, which is not practical on automobiles. The standard procedure of using natural gas as an automotive fuel is to carry it in very heavy-walled tanks, usually in the trunk of the car. This has the disadvantage of decreasing storage space for other items and also substantially increases the weight of the vehicle, which then requires more fuel.
If natural gas is cheap enough, the weight requirement for more fuel use is less significant, and the size of the vehicle can be increased to accommodate the large heavy-walled tanks. The recent discovery of large quantities of natural gas in the Marcellus Shale of the Northeast may give a gas price which can compete with gasoline.
Some other factors are that gasoline is only obtained from crude oil through substantial investment in refineries. Present refineries are operating at about 85% capacity, which is pretty high for any industrialized process. There have been no new refineries in 29 years, because existing refineries had been continually upgraded for efficient operation. It is also predicted that no new refineries are in sight, because of a predicted oil shortage. The oil shortage prediction may not be realistic, because of advances in drilling techniques and the continuing discovery of new reserves. Limitations on oil production in the US have been self imposed by government. That also can change, as we replace the Administration and the Secretary of the Department of Interior, who controls drilling permits.
All told, it's a risk, which as it should be. The possibility of significant profit is there, as well as significant loss, depending upon how a number of factors work out. We will see whether there is still enough entrepreneurial spirit left, with capitalistic motivation to take on the risk. T. Boone Pickens is apparently one member of the conglomerate. He has a reputation for taking risks on big projects, which have generally been successful. Let's hope that this is not an exception.
Excellent news! This is the kind of thing that made America great. Private capital investing in a big idea. It's now a corporation versus the old-time individual greats, such as Rockefeller on railroads, Carnegie on steel, Ford on automobiles, Bell on telephones, but at least, it's not government. We can only hope that government will not meddle with it and screw it up by imposing impediments or supplying grants.
It's a risky business. The basic question is whether natural gas can compete with gasoline as an automotive fuel.
Natural gas usage has been around for many years as fuel for fleet taxis. It has generally been cheaper than gasoline, but is much less convenient to use. Gasoline is a liquid and can be contained in a relatively inexpensive on-board gasoline tank. Natural gas can only be handled as a liquid at very low temperatures, which is not practical on automobiles. The standard procedure of using natural gas as an automotive fuel is to carry it in very heavy-walled tanks, usually in the trunk of the car. This has the disadvantage of decreasing storage space for other items and also substantially increases the weight of the vehicle, which then requires more fuel.
If natural gas is cheap enough, the weight requirement for more fuel use is less significant, and the size of the vehicle can be increased to accommodate the large heavy-walled tanks. The recent discovery of large quantities of natural gas in the Marcellus Shale of the Northeast may give a gas price which can compete with gasoline.
Some other factors are that gasoline is only obtained from crude oil through substantial investment in refineries. Present refineries are operating at about 85% capacity, which is pretty high for any industrialized process. There have been no new refineries in 29 years, because existing refineries had been continually upgraded for efficient operation. It is also predicted that no new refineries are in sight, because of a predicted oil shortage. The oil shortage prediction may not be realistic, because of advances in drilling techniques and the continuing discovery of new reserves. Limitations on oil production in the US have been self imposed by government. That also can change, as we replace the Administration and the Secretary of the Department of Interior, who controls drilling permits.
All told, it's a risk, which as it should be. The possibility of significant profit is there, as well as significant loss, depending upon how a number of factors work out. We will see whether there is still enough entrepreneurial spirit left, with capitalistic motivation to take on the risk. T. Boone Pickens is apparently one member of the conglomerate. He has a reputation for taking risks on big projects, which have generally been successful. Let's hope that this is not an exception.
Monday, July 11, 2011
Implications for My Energy Consuming Countries
High energy use per capita has generally been considered a detriment in a society. Considerable effort has been made by the US government and various organizations to have the public conserve energy. Since the converse of conservation is waste, most people will agree that we should not be wasting our natural resources.
However, we may want to look at some of the countries whose inhabitants are in the highest category of energy usage (waste?) per capita.
We have considered the per capita energy usage of 17 countries, with their associated populations, and some comments relative to energy usage.
Fourteen of the countries are either unusually rich in energy sources, such as geothermal, hydro, oil, gas, coal, and nuclear or are processing some of these materials for export. Exceptions are Luxembourg, as a large investment fund center, and Belgium and Finland in their use of large quantities of energy for production of export industrial goods.
With respect to population, the countries decrease in size from United States through Canada, Saudi Arabia,, Australia, Belgium, and Sweden. The other 11 countries have very small populations. The largest population countries tend to have lower energy usage per capita.
From these data, we can draw several conclusions:
1. The higher energy usage per capita countries have lower populations. This could result from the mathematics of the low population calculation.
2. The higher energy usage per capita countries may have significant energy usage in production and export of energy per se (oil and gas) or from manufacture of industrial products for export. There may also be significant waste because of ready availability of energy sources.
However, we may want to look at some of the countries whose inhabitants are in the highest category of energy usage (waste?) per capita.
We have considered the per capita energy usage of 17 countries, with their associated populations, and some comments relative to energy usage.
Fourteen of the countries are either unusually rich in energy sources, such as geothermal, hydro, oil, gas, coal, and nuclear or are processing some of these materials for export. Exceptions are Luxembourg, as a large investment fund center, and Belgium and Finland in their use of large quantities of energy for production of export industrial goods.
With respect to population, the countries decrease in size from United States through Canada, Saudi Arabia,, Australia, Belgium, and Sweden. The other 11 countries have very small populations. The largest population countries tend to have lower energy usage per capita.
From these data, we can draw several conclusions:
1. The higher energy usage per capita countries have lower populations. This could result from the mathematics of the low population calculation.
2. The higher energy usage per capita countries may have significant energy usage in production and export of energy per se (oil and gas) or from manufacture of industrial products for export. There may also be significant waste because of ready availability of energy sources.
Tuesday, July 5, 2011
Unlikely That the Northeast Will Replace Texas As a Polyethylene Source
EIN News says, "Natural Gas Discoveries Mean Growth Ahead in the Northeast Cheap and abundant natural gas has revitalized the Gulf Coast's petrochemical industry, after demand for its plastic products took a beating in the recession. But some of the chemical comeback isn't coming back to Texas. Discussions about the industry's growth are increasingly focused a thousand miles northeast, in the booming Marcellus Shale region. The natural gas cocktail buried in that Appalachian rock is rich in ethane, the raw material used to create the ethylene that produces many types of plastics. While the Eagle Ford Shale in South Texas offers the same bounty, some industry analysts say the Northeast holds a strategic advantage in its proximity to manufacturers who mold plastic consumer goods. (chron.com)".
That's good news on availability of natural gas from Marcella Shale in the Northeast, but will it come to development? We will grant that there is a market for polyethylene consumer-products from many Northeast molders, but there can always to be a "slip twixt the cup and the lip".
The other favorable aspect is that the Marcella Shale gas as a higher ethane content, which is amenable to cracking to produce ethylene. However, one needs to first separate the ethane from the methane. That takes equipment. Then we need to crack it to ethylene. More equipment. Then we need to polymerize it to polyethylene chips to supply the molders. More equipment. This equipment is not presently available in the Northeast. It is available in Texas in the Houston area. We call it a petrochemical complex. The molding granules are easily shipped by rail car to the Northeast plastic molders, and anywhere else in the US where there are plastic molders.
Could equipment be installed in the Northeast to do the same job that is being done now in Texas. Yes, if could, but why build more than one needs? In addition, there is a high concentration of environmentalists in the Northeast. They will do their best to stop construction of any major petrochemical complex. They will also have the support of the present Federal Administration, which has demonstrated antagonism to the development of any new energy sources, unless it's wind and solar. With pressure from subversive environmental organizations, the Department of the Interior (Salazar) will stall the development of this newly discovered natural resource.
That's good news on availability of natural gas from Marcella Shale in the Northeast, but will it come to development? We will grant that there is a market for polyethylene consumer-products from many Northeast molders, but there can always to be a "slip twixt the cup and the lip".
The other favorable aspect is that the Marcella Shale gas as a higher ethane content, which is amenable to cracking to produce ethylene. However, one needs to first separate the ethane from the methane. That takes equipment. Then we need to crack it to ethylene. More equipment. Then we need to polymerize it to polyethylene chips to supply the molders. More equipment. This equipment is not presently available in the Northeast. It is available in Texas in the Houston area. We call it a petrochemical complex. The molding granules are easily shipped by rail car to the Northeast plastic molders, and anywhere else in the US where there are plastic molders.
Could equipment be installed in the Northeast to do the same job that is being done now in Texas. Yes, if could, but why build more than one needs? In addition, there is a high concentration of environmentalists in the Northeast. They will do their best to stop construction of any major petrochemical complex. They will also have the support of the present Federal Administration, which has demonstrated antagonism to the development of any new energy sources, unless it's wind and solar. With pressure from subversive environmental organizations, the Department of the Interior (Salazar) will stall the development of this newly discovered natural resource.
Sunday, July 3, 2011
US Oil Independence
EIN News said on 6/19, "OPEC Split Threatens Increase in Saudi Oil Production A growing split between the world's biggest oil consumers and major OPEC producers over prices means Saudi Arabia may no longer increase its oil output by as much as it pledged. (telegraph.co.uk)".
The next day it also said, "OPEC Seeks Tranquil Market OPEC's top official said he wanted to mend fences with the International Energy Agency and avoid a repeat of a release of oil from stockpiles that has strained consumer-producer relations. (theaustralian.com.au)
One minute OPEC appears tough and the next minute they appear conciliatory. Why is that?
The answer lies in their recognition that they have started to lose their world monopolistic power. At one time, they could deny production and therefore supplies to the US, which could cause great pain. Some will remember the long gas lines in 1973 as OPEC cut supplies to the US.
That is now a significantly reduced possibility.
OPEC countries produce 32.9 million barrels per day. They collectively consume 7.5 million barrels. Therefore, they have 25.4 million barrels available for export.
The big change has come about in great increases in production of non-OPEC countries. Non-OPEC countries produce 46.9 million barrels per day, consume 59.6 million barrels, and have a deficit of 12.7 million barrels.
While the non-OPEC country still have a deficit of 12.7 million barrels, it is only half of what OPEC countries have available for export.
The big deficit countries are the US with 10.9, the EU with 11.3, China with 4.1 and India with 2.1 million barrels per day. Russia has a surplus of 7.8 million barrels for export.
While non-OPEC countries have considerably increased world oil supply, the US and the EU are still somewhat at the mercy of OPEC, although less so than previously. The US has large oil reserves, which are only unavailable because of government restriction. We are now producing 7.8 million barrels. If we a little more than double the production rate through significantly increased drilling and pumping, we can be out of OPEC's clutches. Russia would likely be glad to supply any temporary deficit amounts.
.
The next day it also said, "OPEC Seeks Tranquil Market OPEC's top official said he wanted to mend fences with the International Energy Agency and avoid a repeat of a release of oil from stockpiles that has strained consumer-producer relations. (theaustralian.com.au)
One minute OPEC appears tough and the next minute they appear conciliatory. Why is that?
The answer lies in their recognition that they have started to lose their world monopolistic power. At one time, they could deny production and therefore supplies to the US, which could cause great pain. Some will remember the long gas lines in 1973 as OPEC cut supplies to the US.
That is now a significantly reduced possibility.
OPEC countries produce 32.9 million barrels per day. They collectively consume 7.5 million barrels. Therefore, they have 25.4 million barrels available for export.
The big change has come about in great increases in production of non-OPEC countries. Non-OPEC countries produce 46.9 million barrels per day, consume 59.6 million barrels, and have a deficit of 12.7 million barrels.
While the non-OPEC country still have a deficit of 12.7 million barrels, it is only half of what OPEC countries have available for export.
The big deficit countries are the US with 10.9, the EU with 11.3, China with 4.1 and India with 2.1 million barrels per day. Russia has a surplus of 7.8 million barrels for export.
While non-OPEC countries have considerably increased world oil supply, the US and the EU are still somewhat at the mercy of OPEC, although less so than previously. The US has large oil reserves, which are only unavailable because of government restriction. We are now producing 7.8 million barrels. If we a little more than double the production rate through significantly increased drilling and pumping, we can be out of OPEC's clutches. Russia would likely be glad to supply any temporary deficit amounts.
.