The energy world turned upside down

I continue to be amazed at how different the energy future is today than it looked only a few years ago. The U.S. could soon become a net exporter of energy and we will almost certainly be the world’s biggest oil & gas producer by 2020. There is even good environmental news in this mix. Our CO2 emissions are dropping. We are beating all those people who gave us a hard time about rejecting Kyoto and doing it with none of the pain they told us we would have to accept.

Just about nobody predicted this happy outcome. (If you claim that you did, you must be very rich by now and if you are not you are lying.) Back in 2000, experts told us that we had around 11 years of natural gas reserves if we continued to use it at the current rate. Now we have a couple centuries of the stuff. There is no such thing as peak oil or peak gas except as a theoretical construction as useful as the number of angels that can dance on a pin head. .

The energy center of gravity is moving to the Americas. I look forward to the day, not far off, when a big Middle Eastern oil producer threatens our energy supply and we tell him to go F himself. I already take pleasure in the disorder and confusion of OPEC.

Americans are lucky people. It has been said that there was a special providence for drunkards, fools, and the United States of America. Maybe so. I have found that when people are especially lucky (or unlucky) over an extended period of time, it usually has something to do with their attitudes or behaviors. This energy bonanza is a good example. Although there are plenty of naysayers even in the U.S., Americans generally embrace the progress. We are "lucky" because we are flexible and take advantage of unexpected opportunities. May this national characteristic never change.


This is an unbelievably good situation. All we need do to take advantage of this is to say "yes" and ignore the troglodytes and luddites who want to proclaim the anti-scientific "precautionary principle."

BTW - speaking of anti-scientific activities, did you hear about the pinheads in Italy who sentenced six scientists to prison terms for not predicting a deadly earthquake? This from the people who brought you the trials of Galileo. You can rest assured that behavior like this makes you unlucky.

Posted by Christine & John at October 24, 2012 2:42 PM
Comments
Comment #355289

Unfortunately C&J, good news for America and “All” her people just doesn’t resonate with some on the left. You won’t get many (or any) responses from them.

This boom in fossil fuel energy is excellent for America. When Romney becomes president we will see a substantial increase in people’s confidence, jobs, and our economy.

Posted by: Royal Flush at October 24, 2012 4:23 PM
Comment #355294

What is your source re CO2? I just spent quite a bit of time searching, and the best resource I found was the CDIAC:

http://cdiac.ornl.gov/trends/emis/meth_reg.html

No one has information on total CO2 emissions more recent that 2009. If you have more recent numbers from a reputable source, such as the DOE, by all means, let me know. US CO2 emissions declined for two years up until 2009- not surprising, considering the economic crash. Intersting factoid: US CO2 emissions declined for three consecutive years during the 80’s.

I’m already aware of the effects natural gas exports might have on overall energy production. It is possible the US will become an exporter in the foreseeable future. At the same time the US is using more natural gas, developing countries such as India and China are continuing to increase CO2 emissions.

I’ve said before, I always thought technology might be the answer to Global Warming, and that it might take a much stranger form than anyone currently imagines. Increased use of natural gas is an improvement, but international cooperation remains key.

The US still produces a huge amount of CO2 each year. Atmospheric CO2 continues to increase, and there’s nothing in sight to change what we’re seeing. An enormous amount of energy is involved in Global Warming (and a lot of gases besides CO2), and changing the enormous momentum that has already been put behind Warming will take more than fracking.

Royal Flush,
I don’t think the election will be as close as most people seem to believe. In the unlikely case Romney wins, I see no reason why anyone would be more confident about the economy, because while Romney has some vague goals about tax reduction and deregulation and deficit reduction, goals without plans are merely dreams. I have no idea what Romney would actually do. I don’t think anyone knows. His current ideas about the economy are not the same as the ones he proposed during the primaries.

Is Romney a moderate who lied to the conservatives, or a conservative who is now lying to the moderates? I think he is a conservative, but that he couldn’t care less about any conservative issues outside of tax policy and deregulation.

Posted by: phx8 at October 24, 2012 5:30 PM
Comment #355299

phx8 writes; “I have no idea what Romney would actually do.”

It makes me laugh when I recall the rallying call of obama in 2008…”Hope and Change”.

Well, Americans hoped, and nothing changed for the better. We have fewer people employed today compared to the day obama took office. We are $6 trillion deeper in debt. We have many more millions receiving food stamps. Consumer prices for food, energy, health care, clothing and more are increasing. Iran is four years closer to having atomic weapons. We are weaker militarily. The Middle East presents more of a threat to peace in the world than four years ago.

What will obama actually do if reelected? From listening to him I find his plan is nothing; expect for more “Hope” and no “Change”. I really don’t consider this much of a plan.

I have a good idea of what Romney wants to do. When elected, we’ll see what he actually can do.

Posted by: Royal Flush at October 24, 2012 6:02 PM
Comment #355305

Chuck Todd, Democrat, said Tuesday morning on MSNBC, “[T]he president’s got bigger problems than trying to disqualify Mitt Romney now; the president has to re-qualify himself for a second term.”

I agree wholeheartedly.

Hope and change will not be enough to qualify obama for a second term.


Posted by: Royal Flush at October 24, 2012 6:49 PM
Comment #355312

Royal Flush,
Generally speaking, Consumer Confidence measures the optimism about the current and future state of the economy.

The Conference Board Consumer Confidence Index improved in September. It now stands at 70.3, up from 61.3 in August. The Expectations Index increased to 83.7 from 71.1. The Present Situation Index rose to 50.2 from 46.5 (from conference-board.org).

Here is a link to a chart on Consumer Confidence.

Notice what happens in 2007? The CCI plunges. That coincides with the economic crash that came at the end of the Bush administration. It bottoms out under 30. During the Obama administration, the CCI has increased to its current point of about 70.

So “Hope” seems to have measureably increased during the first four years of the Obama administration.

Another measurement can be seen in the stock market. During the Obama administration, the American economy has experienced one of the biggest bull markets in American history. It’s a quantifiable indication of optimism about the future of the economy and business.

Once again, “Hope” seems to have measureably increased under Obama.

The economic crash began in late 2007 and bottomed in March 2009, two months after Obama took office. That was the worst, the PEAK, and the economy since improved. The recession came with a terrible cost, no question, in terms of debt and annual deficits. However, that $6 trillion expenditure avoided another Great Depression. Compare that with the previous $10 trillion in national debt; 90% of that came under three presidents, namely, Bush Reagan and Bush, and was squandered in tax cuts and military spending. Big difference.

“We are weaker militarily.”
You know that’s not true.

Iran has suffered a terrible price for its nuclear program. The Obama administration has crippled the Iranian economy with sanctions and cyberwarfare, and someone has carried out some assassinations of Iranian scientists as well. We’re doing everything possible about preventing the Iranians from building a nuclear weapon, short of actually bombing their facilities or invading. I don’t think anyone, regardless of political persuasion, has any better ways of discouraging them.

Posted by: phx8 at October 24, 2012 10:18 PM
Comment #355389

phx8

Just google “us co2 emissions drop” and you will find dozens of articles from NYT to WSJ that have the data you want.

Posted by: C&J at October 25, 2012 6:07 PM
Comment #355406

C&J,
Thank you. Read the articles.
According to the EIA:

“The agency attributed the decline to a combination of three factors: a mild winter, reduced demand for gasoline and, most significant, a drop in coal-fired electricity generation because of historically low natural gas prices. Whether emissions will continue to drop or begin to rise again, however, remains to be seen, experts said Friday.”

So the upshot is US CO2 emissions are the lowest since 1992, primarily due to natural gas replacing coal.

Posted by: phx8 at October 25, 2012 7:35 PM
Comment #355411

phx8

“So the upshot is US CO2 emissions are the lowest since 1992, primarily due to natural gas replacing coal.”

That is what I have been telling you.

“Whether emissions will continue to drop or begin to rise again, however, remains to be seen, experts said Friday.”

A statement that is always true and never useful.

The fact is that we have experienced a revolution in energy. It is another example of how the world is unpredictable. Sometimes this happens on the downside. This time it is breaking on the upside.

Generally speaking, things have more usually been positive than negative for my life.

I was thinking about why I am conservative. I took one of those tests and found that I am culturally liberal, i.e. my habits fit in well in Cambridge or Berkeley. But I am conservative for one big reason. I hate pessimists and perpetual victims. I look at situations and try to find advantages. I ask what people CAN do instead of what is holding them back. These attitudes piss off liberals.

When I look at energy & environment, issues I have been closely following since I was in HS, I am amazed at the good news. Compared to when I started to pay attention in the 1970s, almost everything in the U.S. is better. Most of the things I only dreamed could happen, have happened. Yet the pinheads still talk about things like they go in only one direction, down. Indeed, we still need to worry about those dirty Chinese and others in the developing world, but things are much better for us.

Posted by: C&J at October 25, 2012 8:13 PM
Comment #355412

C&J,

We may be lucky that we have abundant reserves of natural gas. However, it was not luck that resulted in our recent ability to exploit those reserves. It was a combination of government/private R&D and tax credits for well head development initiated as a part of the Carter energy plan in the late 70s.

By the way, it was not in 2000 that “experts” predicted that we would run out of natural gas, it was in the early to mid 70s. That was an accurate prediction at the time. We knew that there were vast reserves of natural gas in the US but technology at that time was not capable of tapping those reserves. The government funded R&D with private partnerships under the Carter plan developed that technology. The tax credits attracted private capital to fund the well head explorations. By 2000, the pieces were in place to bring a vast amount of recovered natural gas on line. Indeed, the tax credits had already expired.

Today, we also understand that there are vast reserves of untapped energy, i.e., solar in particular. But, the technology is not sufficiently refined to fully exploit those reserves. An energy plan similar to the Carter plan would seem appropriate if we want to see another energy “miracle” 30 years from now.


Posted by: Rich at October 25, 2012 8:15 PM
Comment #355419

Rich

You actually credit Carter for innovations that started to become useful twenty years after he left office? You cannot really believe this.

If you look at fracking, you find it is a fairly old technology that just because useful when coupled with developing technologies.

Carter told us we were running out of gas. He limited its use in power stations. He understood it not at all. Please show me in the Carter plan where he predicted a boom in natural gas.

Carter’s big goal was to make gasoline out of coal. If the Carter plan has worked, our CO2 emissions would have been sky high.

Re the experts being right - indeed they were. One of my points is that experts must project current trends, so they are always behind the innovation curve.

Re solar - solar cells themselves are getting very cheap. They could be almost free in the future. The big costs in solar is installation and maintenance. This is what will keep them uncompetitive.

All forms of energy are as “free” as sunshine. The cost comes from gathering it and/or converting it into useful fuels. Oil and gas a cheap and convenient because they are easy to get and use.

Think of any resource. On my land, I have lots of stone. I need stone to protect my stream beds and I have enough stone within walking distance of my steams to satisfy all my needs. Think of this as sunshine. BUT I buy stone for about $600 per 20 tons from a nearby quarry. Why? Because gathering my “free” stone would cost me a lot more in time, effort and energy. This explains lots of resource challenges.

When I talk to people about energy, they often come back to the idea that somehow we are just not using all the free or cheap energy. They fail to account of the kind of costs above.

Let me drop one more example. We produce lots of forestry “waste”. This stuff burns and can be substituted for coal. It is carbon neutral and free. Why don’t we use more of it? It is hard to move, since it is scattered all over the place. Not worth it in many cases.

Posted by: C&J at October 25, 2012 8:54 PM
Comment #355431

“You actually credit Carter for innovations that started to become useful twenty years after he left office? You cannot really believe this.”

C&J,

I believe the facts, not some ideological fantasy and political prejudice. The facts are simple. The Ford and, particularly, the Carter administrations faced with oil crises and limited gas extraction capability initiated action to both conserve available supplies and to initiate actions to increase supply through technology R&D, deregulation (NGPA of 1978) and tax credits for capital investment in wellhead development. See,

http://seca.doe.gov/publications/proceedings/01/carbon_seq/1a3.pdf

http://www.ourenergypolicy.org/wp-content/uploads/2012/05/Where_the_Shale_Gas_Revolution_Came_From.pdf

Posted by: Rich at October 25, 2012 10:28 PM
Comment #355432

Just one final comment on the role of government in the development of the natural gas expansion from a former executive from the company most prominent in implementing modern technology in gas extraction: “The DOE started it,
and other people took the ball and ran with it,” said Mitchell Energy’s former Vice President
Dan Steward. “You cannot diminish DOE’s involvement.”

Posted by: Rich at October 25, 2012 10:39 PM
Comment #355437

Rich

Government played an important role in developing technologies that led to fracking. I have written extensively about that andmy firm belief that government has a key role to play in energy research. You might want to review the post I made last year talking about ARPA-E http://www.watchblog.com/republicans/archives/007708.html. You commented ton that article, BTW.

I wrote - “Here is something we can probably agree about. Let’s not try to pick winners and losers in the energy future. Let’s not give cash and loan guarantees to particular firms that create private profits at government expense. Let’s instead take the same money we would have spent on all this crap and put it into ARPA -E. It won’t help politicians get elected in 2012, but it may give us the beginning of an energy internet.

“No matter what, results will have to be better than the “never green” technologies developed with all that cash we have dropped so far.”


But to credit the programs of particular failed president decades ago doesn’t make much sense. Too many other things have happened. It is like those people who credit HG Wells or Jules Verne for the Apollo project. Lots of people have lots of ideas, but you cannot trace them back like that.

Beyond that, fracking is a result of technology, business culture and regulation. You can see how this works when you compare Pennsylvania to New York. They have essentially the same environment and circumstances, yet one is producing lots of gas, the other not. Or look at the Europeans, who are currently squandering their advantages.

Posted by: C&J at October 26, 2012 5:59 AM
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