The July 11 issue of C&E News also has an article entitled, "Powering Innovation". It says that the Department of Energy (DOE) is accelerating innovative energy research and development in the US. It wants to give teams of scientists and engineers the resources to solve what it considers the US's pressing energy challenges quickly..
The DOE has developed a new term called Energy Frontier Research Centers (EFRCs). Twenty six of these have been funded by the DOE to "identify the gaps and challenges in the fundamental understanding of the science of energy". A second group is the Energy Innovation Hubs, which are focused on alternatives to petroleum based fuels, such as fuels from sunlight and nuclear reactor design/engineering. The third group is the Advanced Research Projects Agency-Energy (ARPA-E), which concentrates on high-risk projects, such as electric fuels using microorganisms to convert CO2 to liquid fuels.
There are 46 EFRC's costing $1.7 billion. There are three Hubs costing $75 million. There are 121 projects in ARPA-E's seven programs at a cost of about $120 million.
One of the Hubs is building new facilities which will employ 150-180 new government employees.
The above costs are on an annual basis and many of them are specified to continue for five years. It appears that total taxpayer-fund expenditures for this pie-in-the-sky operation will run almost $2 billion per year. I say pie-in-the-sky, because none of it is really necessary. We have in the US more than ample supplies of oil and natural gas. We also have private drilling companies in a position to develop these resources. The only inhibition is the US government, which has a twofold program. The first is to inhibit production of oil and gas and the second is to spend money on projects, such as the many above, which will have no practical significance in most of our lifetimes.
Thursday, September 22, 2011
Pres. Obama Should Resign
EIN News says, "U.S. President Obama's Losing Charge on Energy President Barack Obama is racking up an impressive losing streak when it comes to energy. Under pressure from Republicans, he embraced offshore drilling just weeks before the BP oil spill. He offered support for nuclear power, only to watch a disaster unfold in Japan. Gas price hikes in the spring disrupted his economic message. Feeling the heat from Republicans again, he infuriated his green base by bailing out on a long-promised ozone standard. (politico.com)".
I don't accept everything said above, particularly the "embracing" of offshore drilling. President Obama has done everything possible to inhibit oil production in the US. However in general, this is the best news I've heard in a long time. I am impressed that Pres. Obama is losing charge on energy. In addition, everything he touches seems to turn to mud. He is a wonderful speaker, likable and apparently a great community organizer, but he has so far done this country terrible damage. We need him out, out, out, as soon as possible and remove from the White House the Fascist/Socialist team he has installed.
I don't accept everything said above, particularly the "embracing" of offshore drilling. President Obama has done everything possible to inhibit oil production in the US. However in general, this is the best news I've heard in a long time. I am impressed that Pres. Obama is losing charge on energy. In addition, everything he touches seems to turn to mud. He is a wonderful speaker, likable and apparently a great community organizer, but he has so far done this country terrible damage. We need him out, out, out, as soon as possible and remove from the White House the Fascist/Socialist team he has installed.
Monday, September 19, 2011
Release of Emergency Oil Supplies by the US Likely Had No Effect on Oil Price
Open e-mail to Rep. Neugebauer:
Randy,
EIN News says, "Oil Release by IEA Is a 'game-changer' Despite Price Bounce It might not sound like much of a victory. The US and other oil-consuming countries release emergency stocks of oil to put a lid on prices. The result: crude prices in London rise by $1 since the programme began three months ago. (gulf-times.com)".
The United States and more than two dozen other countries that make up the IEA put 60 million barrels of oil into the market this summer in an effort to drive down skyrocketing oil prices.
It is unclear to me how anyone could logically say that the putting of strategic oil supplies into the market had a significant effect on reducing oil prices. We have no way of knowing what the oil price would've been without the "putting". I also do not claim that the "putting" had no effect.
I do recognize that based on normal laws of supply and demand, if the price is increasing on a product, the product is desired and there is a shortage of supply or else the mode of payment has become poorer. I think we can reasonably speculate that while the dollar has been declining in value, there is still a substantial shortage of oil compared to the amount desired.
This leads me into my standard complaint that Obama and the Department of Interior have continually withheld drilling permits to limit the quantity of US oil production in favor of promoting "sustainable" energy.
I also revert to the suggestion of two major oil company CEOs, who claim we need more federal regulators, on the presumption that those additional regulators will speed up the issuance of drilling permits. This is obviously a silly supposition, because all of these people take orders from Obama and Salazar to limit oil production.
Randy, it is up to Congress to change the situation, I don't know how it can be done. Perhaps you have some imaginative technique which could work to increase drilling permits and get more oil flowing.
Randy,
EIN News says, "Oil Release by IEA Is a 'game-changer' Despite Price Bounce It might not sound like much of a victory. The US and other oil-consuming countries release emergency stocks of oil to put a lid on prices. The result: crude prices in London rise by $1 since the programme began three months ago. (gulf-times.com)".
The United States and more than two dozen other countries that make up the IEA put 60 million barrels of oil into the market this summer in an effort to drive down skyrocketing oil prices.
It is unclear to me how anyone could logically say that the putting of strategic oil supplies into the market had a significant effect on reducing oil prices. We have no way of knowing what the oil price would've been without the "putting". I also do not claim that the "putting" had no effect.
I do recognize that based on normal laws of supply and demand, if the price is increasing on a product, the product is desired and there is a shortage of supply or else the mode of payment has become poorer. I think we can reasonably speculate that while the dollar has been declining in value, there is still a substantial shortage of oil compared to the amount desired.
This leads me into my standard complaint that Obama and the Department of Interior have continually withheld drilling permits to limit the quantity of US oil production in favor of promoting "sustainable" energy.
I also revert to the suggestion of two major oil company CEOs, who claim we need more federal regulators, on the presumption that those additional regulators will speed up the issuance of drilling permits. This is obviously a silly supposition, because all of these people take orders from Obama and Salazar to limit oil production.
Randy, it is up to Congress to change the situation, I don't know how it can be done. Perhaps you have some imaginative technique which could work to increase drilling permits and get more oil flowing.
Saturday, September 17, 2011
Curbing CO2 Emissions at Power Plants Will Increase Electricity Costs
EIN News says, "Obama EPA Delaying More Pollution Curbs The U.S. Environmental Protection Agency will delay yet again plans to curb greenhouse gas emissions, its second delay of a major anti-pollution initiative in as many weeks. The head of the EPA said the agency needs more time beyond the Sept. 30 deadline to forge a plan to limit emissions of carbon dioxide from power plants. (msnbc.msn.com)".
It appears that Pres. Obama may be getting the message.
Notice that the September 30 deadline was to submit a plan for limiting carbon dioxide emissions. That deadline has now been extended to some non-determined date. However, Pres. Obama previously pledged that the US will cut its greenhouse gas emissions by about 17 percent by 2020, under 2005 levels, and the EPA is presumably still working under that directive.
What we do not know is what the actual plan will be. There is little doubt that it will be a combination of installation of carbon dioxide capture equipment in coal burning power plants, which supply most of the US electricity, or an alternative tax on those power plants, if they do not conform. This will lead to a significant increase in electricity utility rates.
Pres. Obama does not easily give up on his ideology of converting the US economy to sustainable energy use, which would include wind, solar, and fuels from agricultural products. However, it is likely that he is starting to see that a significant increase in electricity rates before the 2012 elections would seriously turn the electorate against him. For that reason, he wants to delay the EPA operation of instituting emission controls.
Watson is the head of EPA. She works for Obama, and Obama makes the rules and directives.
EPA emission controls would lead to an increase in electricity cost to the American public and would be counterproductive to Pres. Obama's bid for reelection. The flipside is that if Pres. Obama is reelected, you may be certain that all of these regulations will be put into effect, with the net result of further destroying our economy.
It appears that Pres. Obama may be getting the message.
Notice that the September 30 deadline was to submit a plan for limiting carbon dioxide emissions. That deadline has now been extended to some non-determined date. However, Pres. Obama previously pledged that the US will cut its greenhouse gas emissions by about 17 percent by 2020, under 2005 levels, and the EPA is presumably still working under that directive.
What we do not know is what the actual plan will be. There is little doubt that it will be a combination of installation of carbon dioxide capture equipment in coal burning power plants, which supply most of the US electricity, or an alternative tax on those power plants, if they do not conform. This will lead to a significant increase in electricity utility rates.
Pres. Obama does not easily give up on his ideology of converting the US economy to sustainable energy use, which would include wind, solar, and fuels from agricultural products. However, it is likely that he is starting to see that a significant increase in electricity rates before the 2012 elections would seriously turn the electorate against him. For that reason, he wants to delay the EPA operation of instituting emission controls.
Watson is the head of EPA. She works for Obama, and Obama makes the rules and directives.
EPA emission controls would lead to an increase in electricity cost to the American public and would be counterproductive to Pres. Obama's bid for reelection. The flipside is that if Pres. Obama is reelected, you may be certain that all of these regulations will be put into effect, with the net result of further destroying our economy.
Thursday, September 15, 2011
Congress Must Illuminate the Subsidy for Ethanol Use in Automotive Fuel
C&E News has an article entitled "E15 Controversy" in its August 13 issue. E15 is code for the concentration of ethanol in automotive fuel. Ethanol is presently added to gasoline for a 10% concentration and 90% of the US gasoline market uses this modified gasoline..
A group of ethanol supporters and 54 ethanol manufacturers are organized as Growth Energy. They want to increase the concentration of ethanol in automotive fuel from 10% to 15%. The obvious reason is to increase their business of making and selling ethanol. The group has apparently gained the support of the EPA in that the EPA has approved the increase for certain types of vehicles.
Several objections to this rule change had been registered, including damage to engines, but the most significant aspect has been completely ignored.
Ethanol in automotive fuel got its start through the Clean Air Act passed by Congress more than 30 years ago. When the Clean Air Act was passed, it was thought that there was only a short-term tangible supply of petroleum, and that the United States did not have significant reserves. The Act intended to extend the supply of automotive fuel by addition to gasoline and also to reduce dependence on foreign oil. However, that situation has completely changed. We now know that we have very significant oil reserves in the United States and the only reason we are not developing them is because of inhibition by the present Obama administration.
Ethanol is a more costly fuel than is gasoline, and the only reason for its continued use is that taxpayers subsidies artificially reduce its cost to an acceptable level for fuel. Not only should its use in automotive fuel not be increased, it should actually be eliminated through normal market forces. In other words, the only reason for the continued use of ethanol in automotive fuel is its subsidization by taxpayer dollars. That is equivalent to the old practice of digging holes and filling them in order to make work. It is inefficient and completely unnecessary.
Congress should get on with a modification of the Clean Air Act to eliminate the need for ethanol to be used in 2022 to the extent of 36 billion gallons. It must also completely eliminate subsidies for ethanol used in automotive fuel.
A group of ethanol supporters and 54 ethanol manufacturers are organized as Growth Energy. They want to increase the concentration of ethanol in automotive fuel from 10% to 15%. The obvious reason is to increase their business of making and selling ethanol. The group has apparently gained the support of the EPA in that the EPA has approved the increase for certain types of vehicles.
Several objections to this rule change had been registered, including damage to engines, but the most significant aspect has been completely ignored.
Ethanol in automotive fuel got its start through the Clean Air Act passed by Congress more than 30 years ago. When the Clean Air Act was passed, it was thought that there was only a short-term tangible supply of petroleum, and that the United States did not have significant reserves. The Act intended to extend the supply of automotive fuel by addition to gasoline and also to reduce dependence on foreign oil. However, that situation has completely changed. We now know that we have very significant oil reserves in the United States and the only reason we are not developing them is because of inhibition by the present Obama administration.
Ethanol is a more costly fuel than is gasoline, and the only reason for its continued use is that taxpayers subsidies artificially reduce its cost to an acceptable level for fuel. Not only should its use in automotive fuel not be increased, it should actually be eliminated through normal market forces. In other words, the only reason for the continued use of ethanol in automotive fuel is its subsidization by taxpayer dollars. That is equivalent to the old practice of digging holes and filling them in order to make work. It is inefficient and completely unnecessary.
Congress should get on with a modification of the Clean Air Act to eliminate the need for ethanol to be used in 2022 to the extent of 36 billion gallons. It must also completely eliminate subsidies for ethanol used in automotive fuel.
Wednesday, September 14, 2011
Top oil executives need to reevaluate their position on Federal drilling permits
EIN News says, "Shell's President Odum Calls to Ramp Up Oil Federal Regulators Shell Oil President Marvin Odum says the federal government's oil and gas regulators are understaffed, singing a similar tune to another Big Oil executive last week. (nationaljournal.com)".
More regulators? This borders on insanity! But, can two big oil executives be insane simultaneously? Unlikely. Let's take a look at their reasoning.
The reference article gives a more complete picture. Shell's Odum and Chevron's John Watson are trying to address the problem that new drilling permits are very slow in coming. They are presumably judging that increasing the federal staff will also increase the speed at which the permits will be issued. This is a reasonable supposition. While it is not insane, it certainly is naïve.
CEOs of major corporations have one thing in common. They are unusually adept in outmaneuvering their competitors within organizations for the top jobs. This means they have talent and experience in out-negotiating other highly intelligent contenders. It also means that they have little knowledge of how their organizations really work, in spite of the fact that they lead the organizations.
In industry and in government, the top boss has a philosophy of how his business should operate. Underlings quickly understand and conform to that philosophy for the purpose of improving their own careers. In the case of the Interior Department, Pres. Obama through Ken Salazar is the top boss. They have the philosophy that the US should reduce its dependence on foreign oil, not by developing local oil resources, but rather switching to renewable energy, such as wind and solar. To promote renewable energy, they take every opportunity to limit production of US oil, a portion of which program involves minimizing issuance of new drilling permits. The most effective way to do that is to micromanage all aspects of a drilling permit, which then requires additional time and ultimate delay in its issuance.
Because Odum and Watson do not understand that process, they assume that throwing more federal people at the drilling permit issuing problem will lead to increased speed at which drilling permits are issued. Wrong, wrong, wrong!
A simple fact of life is that if you want to speed up issuance of a permit, one must take a more cursory look at the permit and eliminate investigation of many of the minor details. This is not to say that we ignore major aspects, such as environmental considerations, but it would not be necessary to include the pay scale and qualifications of a person required for spill cleanup. That could all be covered by a general liability clause, which says that if you have a spill, you are required to clean it up within a certain period of time to the satisfaction of existing federal regulators and bearing all costs. Arguments among drillers, federal regulators, the general public and organizations thereof can be resolved in federal court. It is not necessary to foresee all eventualities on how to avoid going to court.
Odom and Watson need to look at the big picture. Increasing the staff of the federal federal regulators will only establish an opportunity for government to investigate more miniscule details on permit applications, which in the long run will further delay permit issuance. What is needed is a change in policy at the top levels of government (Obama/Salazar), and that is what Odum and Watson should be fighting for.
More regulators? This borders on insanity! But, can two big oil executives be insane simultaneously? Unlikely. Let's take a look at their reasoning.
The reference article gives a more complete picture. Shell's Odum and Chevron's John Watson are trying to address the problem that new drilling permits are very slow in coming. They are presumably judging that increasing the federal staff will also increase the speed at which the permits will be issued. This is a reasonable supposition. While it is not insane, it certainly is naïve.
CEOs of major corporations have one thing in common. They are unusually adept in outmaneuvering their competitors within organizations for the top jobs. This means they have talent and experience in out-negotiating other highly intelligent contenders. It also means that they have little knowledge of how their organizations really work, in spite of the fact that they lead the organizations.
In industry and in government, the top boss has a philosophy of how his business should operate. Underlings quickly understand and conform to that philosophy for the purpose of improving their own careers. In the case of the Interior Department, Pres. Obama through Ken Salazar is the top boss. They have the philosophy that the US should reduce its dependence on foreign oil, not by developing local oil resources, but rather switching to renewable energy, such as wind and solar. To promote renewable energy, they take every opportunity to limit production of US oil, a portion of which program involves minimizing issuance of new drilling permits. The most effective way to do that is to micromanage all aspects of a drilling permit, which then requires additional time and ultimate delay in its issuance.
Because Odum and Watson do not understand that process, they assume that throwing more federal people at the drilling permit issuing problem will lead to increased speed at which drilling permits are issued. Wrong, wrong, wrong!
A simple fact of life is that if you want to speed up issuance of a permit, one must take a more cursory look at the permit and eliminate investigation of many of the minor details. This is not to say that we ignore major aspects, such as environmental considerations, but it would not be necessary to include the pay scale and qualifications of a person required for spill cleanup. That could all be covered by a general liability clause, which says that if you have a spill, you are required to clean it up within a certain period of time to the satisfaction of existing federal regulators and bearing all costs. Arguments among drillers, federal regulators, the general public and organizations thereof can be resolved in federal court. It is not necessary to foresee all eventualities on how to avoid going to court.
Odom and Watson need to look at the big picture. Increasing the staff of the federal federal regulators will only establish an opportunity for government to investigate more miniscule details on permit applications, which in the long run will further delay permit issuance. What is needed is a change in policy at the top levels of government (Obama/Salazar), and that is what Odum and Watson should be fighting for.
Tuesday, September 13, 2011
Kudos to Congress on Stalling Oil Spill Response
Open e-mail to Rep. Neugebauer:
Randy,
As you know, much of my political writing is derogatory and generally negative with respect to government action. In this particular case, I congratulate Congress on its inaction.
The August 22 issue of C&E News has an article complaining that more than a year has passed since BP's Deepwater Horizon rig exploded in the Gulf of Mexico killing 11 workers and causing the largest marine oil spill in the history of the petroleum industry. The Interior Department immediately revised rules governing offshore oil drilling to include a lengthier and more extensive permitting process. C&E News is lamenting that Congress has made little headway toward addressing the safety issues raised by the disaster.
We have said before that the deaths of workers and the subsequent environmental problems caused by the oil spill are deeply regretted. While fault has been found with BP's operation prior to the spill, there is no doubt that the so-called disaster was also a result of unpredictable natural causes. No one realized that the upward pressure of the oil reserve exceeded the pressure at the bottom level of more than a mile of water. A favorable aspect is also that a completely new large body oil reserve had been discovered.
While fault can definitely be found with BP and its subcontractors, their drilling program was not unduly risky and the accident cost the company a tremendous loss, such that it almost resulted in bankruptcy. On the positive side, significant new information was obtained, which has resulted in improved technology not only for BP but also other deepwater drillers. Let's keep in mind that the business of deepwater drilling is to obtain usable oil and anything that works against that is a detriment to the program. More simply, deepwater drillers avoid unnecessary risks wherever possible, but risks are inherent in any development.
While the oil spill caused considerable damage per se, the action of the Interior Department has probably done more damage to our economy. Our society runs on oil, and the limitations imposed by the Interior Department have significantly reduced our domestic oil production and contributed to our poor balance of international payments, by forcing oil importation. I and others have been fighting that ever since, with our watchwords, "Drill, Drill, Drill".
Reverting to the good news, Congress has been inactive in applying safety rules. These are not needed. The oil industry knows what it has to do, and the Interior Department has already placed more restrictions than we should have. My heart is warmed by the comments of Rep. Doc Hastings, Chairman of the National Resources Committee. I now quote from the Chemical and Engineering News article on what Rep. Hastings had to say, "The regulatory cobweb of red tape and constantly moving goalposts created by the Obama Administration after the Gulf of Mexico oil spill have resulted in a de facto moratorium on deepwater and shallow-water drilling permits. From day one I've said that we need all the facts surrounding the course of this tragic event before jumping to conclusions and passing reforms with long-term consequences."
Let's hope that in the final analysis Rep. Hastings finds it more necessary to limit the the detrimental actions of the Interior Department. rather than develop another set of rules, which would contribute to the destruction of our economy.
Randy,
As you know, much of my political writing is derogatory and generally negative with respect to government action. In this particular case, I congratulate Congress on its inaction.
The August 22 issue of C&E News has an article complaining that more than a year has passed since BP's Deepwater Horizon rig exploded in the Gulf of Mexico killing 11 workers and causing the largest marine oil spill in the history of the petroleum industry. The Interior Department immediately revised rules governing offshore oil drilling to include a lengthier and more extensive permitting process. C&E News is lamenting that Congress has made little headway toward addressing the safety issues raised by the disaster.
We have said before that the deaths of workers and the subsequent environmental problems caused by the oil spill are deeply regretted. While fault has been found with BP's operation prior to the spill, there is no doubt that the so-called disaster was also a result of unpredictable natural causes. No one realized that the upward pressure of the oil reserve exceeded the pressure at the bottom level of more than a mile of water. A favorable aspect is also that a completely new large body oil reserve had been discovered.
While fault can definitely be found with BP and its subcontractors, their drilling program was not unduly risky and the accident cost the company a tremendous loss, such that it almost resulted in bankruptcy. On the positive side, significant new information was obtained, which has resulted in improved technology not only for BP but also other deepwater drillers. Let's keep in mind that the business of deepwater drilling is to obtain usable oil and anything that works against that is a detriment to the program. More simply, deepwater drillers avoid unnecessary risks wherever possible, but risks are inherent in any development.
While the oil spill caused considerable damage per se, the action of the Interior Department has probably done more damage to our economy. Our society runs on oil, and the limitations imposed by the Interior Department have significantly reduced our domestic oil production and contributed to our poor balance of international payments, by forcing oil importation. I and others have been fighting that ever since, with our watchwords, "Drill, Drill, Drill".
Reverting to the good news, Congress has been inactive in applying safety rules. These are not needed. The oil industry knows what it has to do, and the Interior Department has already placed more restrictions than we should have. My heart is warmed by the comments of Rep. Doc Hastings, Chairman of the National Resources Committee. I now quote from the Chemical and Engineering News article on what Rep. Hastings had to say, "The regulatory cobweb of red tape and constantly moving goalposts created by the Obama Administration after the Gulf of Mexico oil spill have resulted in a de facto moratorium on deepwater and shallow-water drilling permits. From day one I've said that we need all the facts surrounding the course of this tragic event before jumping to conclusions and passing reforms with long-term consequences."
Let's hope that in the final analysis Rep. Hastings finds it more necessary to limit the the detrimental actions of the Interior Department. rather than develop another set of rules, which would contribute to the destruction of our economy.
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