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A Natural Gas Centric Strategic Long-Term Comprehensive Energy Policy 58 comments

by: Michael Fitzsimmons April 24, 2009 | about: APD / BP / CHK / CLNE / COP / F / FLR / GE / GMGMQ.PK / HMC / IR / KWK / RRC / TM / UNG    
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Despite current low oil prices, mankind faces its biggest challenge to date: a future in which worldwide oil supply will not keep pace with worldwide oil demand. An excellent summary of peak oil can be read here. A peak oil future will be characterized by economic contractions of increasing severity. Each economic contraction will lead to sharply reduced oil demand and subsequently reduced short-term oil prices; both are being experienced today. Each economic recovery will see increasingly higher peak oil prices until economic growth is stifled. The world is now on an economic yo-yo which is tightly dependent on oil supply/demand fundamentals and therefore the price of oil. If the planet is indeed entering an era in which worldwide oil supply cannot keep pace with worldwide demand; and if the world economy is indeed dependent on oil to grow; logically these two hypotheses taken together cannot bode well for future worldwide economic prosperity.

In this context, it is important to examine the petroleum supply/demand fundamentals of the world’s largest consumer of oil - the United States:

Worldwide Oil supply
87,500,000 barrels/day
Total US petroleum consumption
20,680,000 barrels/day
Total US petroleum imports
12,036,000 barrels/day

Dependence on net petroleum imports
58.2%

% US oil consumption for transportation
70%

US Motor Gasoline Consumption
390,000,000 gallons/day
EIA, Feb 2009

Looking at these figures, one can make a logical conclusion:

In order to meaningfully reduce foreign oil consumption, the US must significantly reduce demand from its transportation sector.

US dependence on foreign oil imports has led directly to huge American trade deficits and indirectly to massive American fiscal deficits. US policymakers continue to focus on financial based solutions (bailouts, fiscal stimulus, etc) in an attempt to solve a commodity based problem (oil). This approach has been and will continue to be ineffective. The only way to solve the economic, environmental, and national security problems facing the US due to its dependence on foreign oil imports is adoption of a strategic long-term comprehensive energy policy.

Since 70% of American oil is consumed in the transportation sector, US energy policymakers should first identify which domestically available fuel can reduce vehicle oil demand (gasoline) in an economically viable way. The fuel of choice must be capable of being scaled up over the next 5 years in order to significantly reduce foreign oil imports while doing so an in environmentally friendly manner.

Alternatives to the gasoline powered internal combustion engine existing today are:

  • Hybrid Vehicles
  • Electric Vehicles (EVs)
  • Hydrogen fuel-cell Vehicles
  • Natural Gas Vehicles (NGVs)

Although electric/gasoline powered hybrid vehicles do have higher fuel-efficiency standards, they suffer from a basic problem: they still run on gasoline

EVs in theory are an excellent choice. However, until nuclear or renewable wind and solar infrastructures are built out in order to supply the energy necessary to recharge a significant number of EVs, an energy policy based on adoption of EVs will necessitate increased burning of toxic coal. Despite the percentage growth of the last few years, solar and wind combined still produce less than 3% of US electricity demand – clearly insufficient to recharge a significant number of EVs. Additionally, large scale adoption of EVs would likely trade our foreign oil addiction for an addiction to Asian battery technology. And then there is the range anxiety of EVs. The US should continue to develop and deploy EVs and battery technology, but must be pragmatic about their ability to reduce foreign oil imports in the near term.

Within the next 20-50 years hydrogen will likely be the energy fuel of choice due to its abundance, efficiency, and its cleanliness. Yet hydrogen fuel-cell vehicles are simply not a mature technology today. Nor is hydrogen generation or delivery systems ready today.

Natural gas vehicles appear to be the best alternative available today. The technology is proven, mature, and can be readily available. The Honda Civic GX has a range of over 200 miles and is currently being refueled in Utah for $0.88/gallon equivalent. That said, the best solution is the electric/natural gas hybrid vehicle Toyota (TM) introduced last year at the LA Auto Show.

This vehicle has the following advantages:

  • A hybrid that runs on electric batteries and natural gas
  • Over 20% lower CO2 emissions than gasoline vehicles
  • Zero particulate emissions
  • 33 mpg
  • Reduces foreign oil imports
  • 250+ mile range

It is clear that NGVs and CNG/electric hybrids are the best vehicles of choice to reduce foreign oil imports.

Fortunately the US is blessed with an abundant domestic supply of clean, cheap, and readily available natural gas. Recent discoveries of natural gas in the Marcellus, Barnett, Fayetteville, and Bakken shale formations led to a 9-10% increase in US 2008 natural gas production – the largest rate of increase since 1984. The Haynesville shale alone could well turn out to be one of the largest gas fields in the world.

The figure below shows monthly US natural gas production figures and is significant for two reasons. Note the vertical spike in supply over the last few years as companies successfully drilled into these new shale discoveries and brought large new supplies onto the market. This huge increase in supply has been significant enough to break the historical relationship between oil and natural gas price. While oil today is close to $50/barrel, the glut in natural gas supply has pushed prices below $3.60 per MMBtu.


People like Robert Hefner III, who predicted way back in the 1970’s that US natural gas was abundant have been vindicated. In his recent book The Grand Energy Transition (or GET), Hefner presents a powerful case that while natural gas is a fossil fuel and created in many biological processes, it is also quite logical natural gas also has a non-biologic origin. Natural gas is found in many places where oil and coal are not. The reverse is not the case: natural gas is always found wherever coal and oil exist. During the decade of the 1990’s while big oil companies explored primarily for oil, more reserves of natural gas were discovered. As a result of these and other observations, Hefner believes the energy content of worldwide natural gas reserves could well exceed the energy of the world’s coal and oil resources combined.

In addition to lower-48 shale assets, there are huge proven reserves of Alaskan natural gas. Taken together, energy experts now estimate American natural gas reserves are adequate to supply all its home heating, industrial and electrical generation requirements for 60-100 years. If these experts are correct, and recent E&P data indicates they are, this means the US could very easily leverage its natural gas supplies to power cars and trucks in the transportation sector.

From a pricing perspective, today’s low natural gas prices mean many NGV owners are refueling their vehicles at less than half the cost of gasoline. Historically, nat gas has run about 2/3 the price of gasoline. A meaningful shift to natural gas for transportation would significantly increase demand and provide upward pressure on prices. However several recent developments help mitigate these concerns:

  • Recent shale discoveries have greatly increased domestic natural gas supplies.
  • Recent shale discoveries have reduced reliance on hurricane threatened Gulf of Mexico natural gas.
  • Plans to construct natural gas pipelines from Alaska to the lower-48 bold well for longer term natural gas supplies.
  • Worldwide LNG and associated LNG terminal infrastructure will favorably influence natural gas availability and price.

Another factor to be considered when considering natural gas prices is long-term oil prices. If worldwide oil supply will not keep pace with worldwide oil demand, the skyrocketing oil prices of 2008 are only a preview of the future. Therefore, natural gas price estimates must be compared directly with future oil price estimates. In this comparison, abundant natural gas supplies win hands down. Even if natural gas prices do rise, the money US consumers would pay to refuel their NGVs would stay in the United States and go to US based energy companies and as royalties to US farmers and landowners. Who should be funded by American energy dollars? Fellow Americans or unfriendly countries like Saudi Arabia, Iran, Iraq, Russia, and Venezuela? This is a no-brainer.

Building a CNG refueling infrastructure would be a significant investment. However, in this day and age of financial bailouts and stimulus packages, why doesn’t it make sense to do so? Like the cross country interstate highway system, or man-on-the-moon projects, a CNG refueling infrastructure would pay dividends to all Americans for decades to come and would pay for itself within 5 years by significantly reducing foreign oil imports. Such an infrastructure build out would provide good jobs, revitalize American companies, and provide much infrastructure that could be reused by a future hydrogen based economy.

One of America’s biggest competitive strengths is its 2.3 million mile natural gas pipeline grid. This grid supplies natural gas to every major metropolitan area in the US. The grid connects 63,000,000 US homes where 130,000,000 cars and trucks could be refueled every night in the garage while their drivers sleep. America’s natural gas reserves combined with her natural gas pipeline grid is the best weapon the US has in the war on foreign oil addiction. Natural gas is the only US domestic fuel that can be scaled up over the next decade to meaningfully reduce foreign oil imports. The US simply needs to make the decision to do so and get it done.

The chart below summarizes the CO2 and particulate emissions of the various fuels.

FUEL
CHEMICAL
COMPOSITION
CHEMICAL
STRUCTURE
EMISSIONS

CO2 EMISSIONS

LBS/MILLION BTU
Coal
60-80% Carbon
5% Hydrogen
Complex
Very toxic
210
Oil

C6H14 (hexane)

C8H18 (octane)

C5H12 to C36H74
Complex
Toxic

156 (gasoline)

161 (diesel)
Natural Gas
CH4 (methane)
Simple
None
115
Hydrogen
H
Simplest
None
None
Wind/Solar
N/A
N/A
None
None

The US burns 390 million gallons of gasoline a day. Each gallon burned combines with oxygen in the air and emits 19 lbs of CO2 into the atmosphere. This means in one year US drivers release 2,704,650 million pounds of CO2 into the Earth’s atmosphere from burning gasoline. In addition to CO2, gasoline emits toxic particulates causing the smog which is visible in so many American cities.

How does natural gas compare? As the chart above shows, natural gas has half the CO2 emissions of coal and 30% less than gasoline. More importantly, natural gas has none (ZERO) of the toxic particulate emissions of coal and oil. It is clear natural gas is environmentally superior to both coal and oil. Environmental “purists” who simply lump natural gas into the “fossil fuels” category are mixing the historical environmental problems (coal and oil) with the 21st century solution (natural gas). Environmental purists who lack the ability to take a pragmatic view of the entire energy problem and support only wind and solar and EVs are shooting themselves in the foot by actually supporting continued short term addiction to oil and coal and the greenhouse gas emissions they spew into the atmosphere!

Natural gas should be the fuel of choice to serve as the backbone of a strategic long-term comprehensive US energy policy:

A Strategic Long-term Comprehensive US Energy Policy

STEP 1: Acknowledge the Problem

  • No difficult problem can be solved until it is first acknowledged. US government and media should inform and educate the American people about the economic, environmental, and national security threats worldwide oil supply/demand realities pose to the US.
  • Create a National Energy Council (NEC) to develop and speed implementation of top-level energy strategy. The director of the NEC should report directly to the President at the Cabinet level.
STEP 2: Articulate a Top-level Energy Strategy
  • US government and industry need to articulate and publicize a top-level energy strategy that can be summarized as follows: the US needs to use less dirty and expensive coal and imported oil and instead use more US domestic natural gas, wind, solar, nuclear and hydrogen.
  • US energy policy must recognize that natural gas is the only domestic fuel supply capable of being scaled-up within the next 5-10 years to meaningfully reduce American's foreign oil imports and greenhouse gas emissions. America should become the world leader in CNG vehicles and CNG refueling.

STEP 3: Conservation and Energy Efficiency

  • Increase fuel-efficiency standards substantially and immediately.
  • Increase gas guzzler green taxes and encourage non-gasoline powered vehicles via increased tax rebates.
  • Impose a top speed limit of 60 mph nationwide.
  • Adopt four-day workweeks wherever and whenever it makes sense.
  • Conservation and efficiency guidelines should be issued by federal, state, and local governments.

STEP 4: Transportation Initiatives

  • Convert at least half of all American cars and trucks to run on CNG by the year 2015. This will be done by retrofitting existing vehicles to run on natural gas, and by increased production of CNG vehicles. Tax credits should cover conversion costs.
  • Focus on natural gas home refueling appliances to enable widespread ownership of NGVs to the 130 million vehicles already residing in homes on the existing natural gas grid. Tax credits should cover the installation costs of a CNG home refueling appliances.
  • Tax credits should be given to gas stations in order to cover costs of providing natural gas refueling pumps. Tax credits should also be available to businesses so employees can refuel with CNG at work.
  • Substantial government assistance for US automakers to tool-up CNG and CNG/electric hybrid vehicle production. Government assistance will extend to the production of home refueling appliances.
  • Tax credits to build out natural gas refueling stations along the nation's interstate highway system.
  • All government vehicle fleets should switch to NGV’s. Encourage local municipal use of natural gas (refuse pickup, buses, mass transit, etc). Develop the natural gas conversion kit market to convert existing gasoline powered vehicles to NGVs.
  • Develop electric and natural gas powered mass transit for people and goods.
  • Place a green tax on all imported oil and all coal usage. The revenue generated will go *only* toward building the natural gas, wind, solar, and electrical infrastructures needed to move toward a gas based energy society. The taxes should be ramped up over a 5 year period to allow for economic planning and adjustment.

STEP 5: Prioritize and Invest in Sustainable Green Energy Sources

  • Abolish federal subsidies for the oil and coal industries.
  • Abolish biofuel and ethanol mandates. Abolish import taxes on Brazilian ethanol.
  • Eliminate the construction of new coal power plants. Replace existing coal plants with more distributed natural gas electrical generation.
  • Construct a trans-Canadian natural gas pipeline from Alaska to the lower-48.
  • Begin a government sponsored “battery technology” program in order to insure that the US is a leader in battery research, design, and manufacturing.
  • Invest in wind, solar, nuclear, geothermal, and tidal energy generation to power non-gasoline powered transportation solutions.
  • The natural gas & electric grid infrastructures must be updated and their capacities dramatically increased.
  • The government must deem electric transmission lines a matter of national security and invoke eminent domain in order to construct them as needed to deliver solar and wind energy from source to consumption.
  • Streamline permitting and construction of latest generation nuclear power plants and LNG terminals.
  • Open the continental shelf and Alaska to natural gas drilling. The royalties on these resources will help fund other components of this energy plan.
  • Use wind and solar power generation of hydrogen via electrolysis as a storage mechanism for calm and cloudy days. Hydrogen power generation needs encouragement.
  • Increase funding for hydrogen fusion research and development.

STEP 6: Social Initiatives

  • Encourage local sustainability in energy generation, food production, and transportation.
  • Encourage population control through education.
  • Encourage green power education, business, and industry.
  • The US voting public should demand energy accountability by its political leadership.
___________________________________________

Investment ideas based on such an energy policy:

  • For natural gas vehicles: Honda Motor Company (HMC), Toyota Motor (TM), and Clean Energy Fuels (CLNE). Hopefully Ford (F) and General Motors (GM) could be added to this list in the near future.
  • For natural gas: Chesapeake Energy (CHK), ConocoPhillips (COP), Range Resources (RRC), British Petroleum (BP), and Quicksilver Resources (KWK).
  • For natural gas infrastructure plays: General Electric (GE), Ingersoll Rand (IR), Fluor (FLR), and Air Products & Chemicals (APD).

Disclosures: The author owns COP.

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This article has 58 comments:

  •  
    This is a derivation on the Pickens plan.Reformed oil man, repenting sinner, and borne again environmentalist T. Boone Pickens says that “when we turn the US green, it will have the best economy ever.” I met the spry, homespun billionaire at San Francisco’s Mark Hopkins on a leg of his self financed national campaign to get America to kick its dangerous dependence on foreign oil imports. For the past 30 years, the US has had no energy policy because “no one wanted to kick a sleeping dog.” Production at Mexico’s main Cantarell field is collapsing, and will force that country to become a net importer in five years. Venezuela is shifting its exports of its sulfur laden crude to China for political reasons, once refineries in the Middle Kingdom are completed to handle it. Unfortunately, the collapse of energy prices since June and the disappearance of credit have put urgent alternative energy development on a back burner, with his preferred natural gas (NG) taking the biggest hit. If the US doesn’t make the right investments now, our energy dependence will simply shift from one self interested foreign supplier (Saudi Arabia) to another (China). Wind and solar alone won’t work on still nights, and can’t power an 18 wheeler. Don’t count on the help of the big oil companies because they get 81% of their earnings from selling imported oil. The answer is in a diverse blend of multiple alternative energy supplies from American only sources. Although Boone now has Obama’s ear, it’s a long learning process. Boone has donated $700 million to charity, and says the 20,000 trees has planted should offset the carbon footprint of his Gulfstream V. I worked with Boone to organize financing for a Mesa Petroleum Pac Man oil company takeover in the early eighties, when it was cheaper to drill for oil on the floor of the New York Stock Exchange than in the field. Now 80, he has not slowed down a nanosecond.
    Apr 24 10:54 AM | Link | Reply
  •  
    There are still a lot of gaping holes in peak oil theory, but heck, nothing draws attention to a cause better than prophecies of societal annihilation. Still, I'm all for converting to American natural gas, wind, biofuels, whatever it takes, but there's one major obstacle nobody wants to deal with. The Luddites and Greens oppose virtually all new energy production, even if it's renewable. Along with other pie-eyed dreamers, they share control of the political Left and, in case anyone missed it, the Left now runs Washington like Anthony Soprano did New Jersey. Pelosi, Reid, Schumer and their ilk will do whatever it takes to limit future drilling and expansion of the resource base.
    Apr 24 12:19 PM | Link | Reply
  •  
    Hi Michael,
    Excellent, persuasive article on your favorite topic! NG transportation happens to be important to me also, and that's largely due to some of your recent articles.

    I’m frustrated beyond belief that our country is so sluggish to do anything to address the energy noose around our collective necks. We just continue to kick the can down the road. That’s been a 35 year road by my count. Ho-hum. Oil is relatively cheap now. Life is good. We can fill our gas tanks for less than two bucks a gallon. Funny how the sudden price drop makes everything seem so warm and fuzzy. Problem solved, another crisis averted by that trusty American standby -- procrastination.

    The need to supplant at least a portion of our oil imports is obvious, as has been successfully argued in your posts many times.

    It's hard to believe that NG/CNG is virtually ignored as a motor fuel, for all the reasons you mention. It's a proven technology that we can use NOW! Guys have been doing self-conversions of cars and pickups for over two decades. Local government fleets have proven the technology.

    That NG would reduce air pollution is obvious. It's a much cleaner burning fuel, so much so that people somehow find a way to burn it in their kitchens to cook dinner. It's long been known that lubricant oil changes can be extended to the durability limits of the lubricant itself, because it doesn't become contaminated by gasoline combustion byproducts.

    I suspect that the main drawback in the minds of many people is along the lines of concerns raised by User283977 in another post, whether " ... we have sufficient natural gas reserves to meet 10, 20, and 30% of transportation demand over the next 20 - 30 years ...".

    Another huge concern is the impact on NG supplies and prices. That really needs to be addressed in a convincing way by anybody arguing for using NG as a motor fuel. Many people, especially politicians, would cringe at the thought of burning NG in competition with the mom and her shivering kids who already have a hard time paying for home heating in the dead of winter.

    People just need a bit more reassurance on availability of supply and price. Don't get me wrong. I want that Toyota NG-Hybrid today! I believe NG is a viable and immediately available supplement to petroleum distillates for transportation. I look at it this way: political will and popular support were able to push ethanol forward until it became painfully obvious that it was a very bad idea. The US went to ethanol because it's easy. It was easy politically because it immediately appealed to the grain belt states, and it’s easy to produce using old technology, and it blends into the existing fueling infrastructure - except that it must be transporting by trucks, not pipelines. If we can develop ethanol despite its net consumption of more energy than it provides, NG as an intrinsically superior alternative, should be a fairly straightforward sell to the American people.

    --R
    Apr 24 12:43 PM | Link | Reply
  •  
    Your ideas for solving our energy problems are excellent and well presented. I'm not so sure about hydrogen as a transport fuel in the future but perhaps a breakthrough will improve its potential. The other area that requires immediate attention is pushing forward with the IFR nuclear reactor development. We will need some more of the current technology nuclear plants to bridge the gap until IFR generators take over but we must be sure to NOT use any intermediate designs that produce waste products that cannot be burned in the IFR reactors.

    For investment ideas you forgot to include Westport (WPRT), the maker of heavy duty NG fueled engines for trucks and buses.
    Apr 24 12:45 PM | Link | Reply
  •  
    The only real salvation to the world's energy crisis, is Low Energy Nuclear Reactions (LENR). You must watch a very important CBS 60 Minutes program just aired this past Sunday, April 19, 09. Follow the link in this article to watch it:

    The True Rationale of Commodities Supply and Demand
    stockology.blogspot.co...

    I believe UNG is about at the bottom and it is time to addgressively add positions in UNG.
    Apr 24 12:52 PM | Link | Reply
  •  
    Good, factual post! We certainly need to wean the U.S. away from imported petroleum quickly, and with minimum expense. CNG may be the way, if not bio-fuels and EVs. Probably a mix of each of these as well as petroleum-based fuels during a transition period.

    One flaw in the CNG argument is the 4:1 lower energy density of CNG vs. gasoline. Thus for equal range and energy efficiency, a car powered by CNG would require 4x the tank volume of a gasoline-powered car. I don't know how the Honda GX packages its tank into its body, but I suspect it simply has reduced range and/or trunk space compared to a gasoline-powered version.

    The cost of conversion from gasoline to CNG runs $5000 to $7000 per vehicle, and it's hard to believe that this will be economic until the price of gasoline returns to well over $4 per gallon. I drive a Ford Escape hybrid, and I figured I'd break even on the $3000 cost premium after tax credit with gasoline over $2.75 a gallon; made money last summer, not this year. The cost to convert the entire U.S. light vehicle fleet of 240 million vehicles (R.L. Polk) to CNG would be an astronomical $1.5 trillion (doesn't sound so bad in comparison with the projected federal deficit).

    Safety is also a concern: a house I used to live in blew up a few years ago because a technician made a wrong connection to a high pressure gas line. Two houses were destroyed here in central Virginia last year when an interstate gas line blew up. The thought of householders plugging their cars into gas lines for overnight refills scares me. But then gasoline is explosive, too, it's just not under pressure. CNG refueling at service stations with trained operators and reliable devices sounds better to me; that's how I get the propane bottle for our grill refilled.

    For these reasons, the Pickens Plan dropped the idea of using CNG for light vehicles last year, and is now concentrated on adoption of CNG for heavy trucks. This is supported by the fact that major CNG lines tend to parallel the major interstate truck routes. I have every respect for Boone Pickens and his investment in the cause; he has the good sense to realize the limitations of CNG as a vehicle fuel in the near term.

    You suggest a number of policy steps that should be taken, and I can agree with some, particularly slapping an import tax on petroleum. I do not believe that there is an effective government solution to the problem, however; far better to let the market sort out the best among alternative fuels for our future transportation needs.
    Apr 24 01:26 PM | Link | Reply
  •  
    hello all, and thanks for reading and commenting. i apologize for the table/text overlap problem..it must be something i am doing in my original .doc file, but i haven't figured it out yet. the tech folks at SA are looking into it. hopefully, i can fix it in the future! meantime, i'll jump in:

    MadHedgeFundTrader: i agree with most of what you said there except for perhaps one comment: that boone has obama's ear. although boone has apparently (finally) earned a seat at the table, i have yet to once hear obama utter the words "natural gas transportation". further, obama's energy secretary recently said he is "agnostic" about nat gas transportation. you may be right that pickens has obama's ear..whether obama and his administration are listening is i suppose another question.

    nrgwatcher: i agree that the "greenies" (as you refer to them) are shooting themselves in the foot because of their lack of pragmatism wrt energy policy. their positions to back solar and wind at the expense of natural gas is, in fact, keeping us addicted to coal and oil and the emissions they spew into the atmosphere. i consider myself an environmentalist, and i fully support solar, wind, and EVs...but a realistic view of the energy challenges posed to the US by peak oil and our 60% dependence on foreign oil and their emissions require some common sense decisions. so, i'll take the nat gas's 20%/50% CO2 reductions over gasoline/coal (respectively) and the lack of particulate emissions. where you and i differ is on peak oil. if you don't believe in peak oil, how do you explain traders putting a $50 price on oil today when inventories are at a 20 year high and we are in the deepest recession since the 30's? in the "old days", oil would be at $8/barrel right now. but they are at $50 and i believe that's because the traders understand peak oil, and they understand that china is snapping up oil reserves all over the world while the US sends all its middle class taxpayer monies to rich bankers, insurance, and financial services executives..

    respirate: thanks. and you are right, User283977 sent back some great feedback and i am working on that article right now - hopefully SA will publish it as a companion article to this one. i am having fun with the calculations and it very interesting (at least to me, but i am nat gas OCD). and yeah! i would pay $30k in a NEW YORK SECOND for that toyota electric/nat gas hybrid. i'd buy TWO of em!! hopefully, my next article will address some of your concerns about nat gas supplies and prices - plz look for it and send in more feedback. thanks.

    ripskii: yeah, hydrogen is out there in the future, i agree. meantime, i hate to admit it because i used to be anti-nuke, but, looking at the energy projections and our current over-reliance on coal i must admit i agree with you on nuclear. i simply don't see how we can meaningfull deploy EVs without adding more nuclear supply. thanks for pointing out westport - honestly, i wasn't aware of the company but since they fuel trucks and buses, and since most CNG use is in fleets today, you're right, WPRT could be an excellent investment. i need to investigate a bit.

    mark anthony: i agree we need more nuclear, although i must plead ignorance when it comes to the technical distinctions between IFR (see ripskiis comment) and the LENR you refer to. perhaps i will start looking into nuclear as, after my next NG article, i am not sure there is much more for me to write about in the nat gas area. thanks for the link, i'll watch it tonite.

    rrbatch: thanks for the compliments. i used to support biofuels, but after reading Robert Hefner's book (The GET), i no longer support them. they cause food inflation and use ever more critical water supplies. also, it just doesnt make sense when cheaper and clean nat gas is readily available. regarding your energy density argument, that is why it is CNG (emphasis on compressed). the Civic GX is spec'd for 8 GGE (gas gallon equivalent) at 3600 psi.
    you're right about conversion costs, and this is one case where i think gov tax rebates should pick up the tab. it would put alot of people to work in the auto industry, reduce foreign oil imports, and clean up the air - a lot more benefits than these financial bailouts are providing, that's for sure. as far as the total cost to convert, that cost would pay for itself easily in a few years with the reduction in foreign oil and the subsequent money staying in the states by going to american energy and auto companies as well as for nat gas royalties to farmers and landowners. as far as safety, people keep saying that about NG vehicles and my research, with all due respect, shows that it simply is not true that NGVs are more dangerous than gasoline vehicles. you can find disastrous wrecks with each. safety data from california and utah, two states with significant numbers of NGVs do not support the conclusion that NGVs are much more dangerous than gasoline cars and trucks. can u point me to a study that says otherwise? i'd like to read it. i don't think that is why pickens dropped CNG for cars and light trucks, he never supported them in the first place. that is one of the differences i have with pickens, he's always been about fleets and i simply don't see how fleets alone will reduce foreign oil imports to the extent the country needs to do so. as far as the markets sorting out the best alternative - isn't that exactly how we got to our current 60% reliance on foreign oil in the first place? actually i am wrong - the government is subsidizing coal and oil now! why not *change* and support cleaner, abundant, and US produced cheap natural gas for the transportation sector instead? we need to make a big U-turn, on a huge scale, fairly quickly. i simply can't see how this is done without government policy initiatives. otherwise, we simply stay addicted to foreign oil, and we know where that will lead us (i.e. economically it looks alot like where we are today...). thanks.
    Apr 24 02:46 PM | Link | Reply
  •  
    Fitz: Yeah, I used to be against nuclear power too primarily due to the accumulation of very long half life waste with no responsible solution to dispose of it. The IFR reactor changes all that however as it can burn up all the accumulated waste and recycle it into a waste with about 200 year half life and a much smaller quantity of it too. This is a viable solution that has been set aside for over a dozen years. GE has a design called the S-Prism that is based upon the IFR technology and while the concepts have all been built, tested and proven they work a commercial sized unit remains to be built. This is a vital component of any long range clean energy program and we must get moving on it. Quite a lot of information is out there on the subject, just Google IFR reactor. Below is a link that explains what was done on this program.

    skirsch.com/politics/g...

    Pickens' effort to introduce gas (CNG & LNG)as a transport fuel for trucks and buses depends on Westport to deliver the engines and they are doing it.
    Apr 24 04:27 PM | Link | Reply
  •  
    How about comprehensive policy: let market decide? If there is a competitive natgas or electric vehicle technology, it will win on the market. If not, it's not gonna happen anyway.

    No technology is sustainable if it needs constant government support.

    And let's stop offending our main oil suppliers: Canada and Mexico. They are NOT supporters of terrorism. They are NOT unfriendly. They are our neighbors and friends.
    Apr 24 05:28 PM | Link | Reply
  •  
    ripskii: ok, now you have intrigued me. i am going to start doing some nuclear energy research after my next nat gas article. thanks for the link.

    alex filonov: ok, let's let the market decide: take away the subsidies for coal and oil and let the chips fall where they may! you seem to forget the heavy subsidies that coal and oil are getting now, and have been getting, since the 1970's. add in the oil wars and the cost to secure oil shipments to the US and then where does nat gas stand? answer: a superior US produced fuel. here's the real history: congress, at the advice of exxon at the time, actually prohibited natural gas from new industrial and electrical generation in the late 1970's (!). that is what led to the huge buildout in coal burning electrical generation in the US (which we are now paying a huge environmental cost for). natural gas has taken a backseat to oil and coal ever since in the eyes of the government and governmental policy. i mean, have you actually read EPA regulations wrt NGVs? what a joke. you should consider reading robert hefner's book, The Grand Energy Transition, so you can get the full story. also, i have never offended canada or mexico. i have said that mexico will likely cease to be a significant oil exporter within the next 5 years, and i have stated that i think it is ridiculous to use huge caterpillars to dig oil sands out of the ground, boil it using natural gas and lots of fresh water, only to obtain a low grade crude that needs further refining in order to achieve gasoline when we have natural gas ready to use as is! that is not the market deciding, that is government policy keeping us addicted to oil at any and every cost. it's absurd in my opinion.
    Apr 24 08:00 PM | Link | Reply
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    Michael, I don't know what you mean about "subsidies for oil." It's the most heavily taxed and regulated industry in the world, from wellhead to retail gas pump.

    CNG is okay for light passenger cars (assuming all the tax breaks and subsidies you indicated for infrastructure), but it can't power aircraft or heavy equipment.

    Commercial oil companies, large and small, are plain old fashioned industrial enterprises. They are being shut out and squeezed by governments. Remaining potential exists in abundance, but no one wants to lose billions (again) in Russia.

    The one and only cure for peak oil is to get government out of the way, let the market allocate investment. Obviously, that's not going to happen, so you're probably right -- the illogical solution will win.
    Apr 24 10:58 PM | Link | Reply
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    Fitz: I was looking for the Hefner book, but couldn't find one on any of the usual web sites (Amazon etc). Any advice on where to find it? I did find an interesting tv link of an interview with Hefner.

    fora.tv/2009/02/24/Rob...

    A book that discusses the IFR reactor and other interesting related subjects is "Prescription for the Planet" by Tom Blees and is available on Amazon. I found its organization frustrating but it contains a lot of useful information and ideas that offer solutions for many of our energy (and environmental) problems.

    As an interesting aside the ancient Chinese drilled for natural gas in the 1st century BC achieving depths up to 4800 feet using bamboo drills strings and iron drill bits. Ref. "The Genius of China" by Robert Temple pg. 51-54.
    Apr 24 11:14 PM | Link | Reply
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    The idea of running cars on NG or hybrid NG/electrics has a lot going for it. My initial thought, when I heard of Picken's plan, was that NG PHEVS would be a great combination, with quite low emissions.
    But there are other things to at least consider

    What about the argument that as far as powering cars, NG is almost twice as efficiently used in power generation to run electric cars, than using NG in cars?
    climateprogress.org/20.../

    Is there enough NG to run cars without shutting down gas power plants? Because shutting down gas plants and letting coal plants run makes no sense. Increasing efficiency of power plants would
    save

    While the article focuses on ending oil imports, which is a good thing, we should also be focusing on phasing out dirty coal plants.



    Mad Hedge Fund Trader

    "Wind and solar alone won’t work on still nights"

    True, except for CSP with heat storage, which can run at night with valuable dispatchable power, and with far cheaper energy storage than batteries. Also, there is a lot to be said for the option of combining NG firing with solar plants, like the NREL pilot plants in the Mojave. CSP is already the cheapest solar power and will become much cheaper in the near future.


    www.altenergystocks.co...

    www.nrel.gov/csp/troug...


    If John Peterson is right (series of articles at Seeking Alpha), and advanced lead acid batteries are a cost effective choice for hybrids, PHEVs etc, then we can avoid the dependence on Asian battery imports. Exide (XIDE)intends to manufacture and sell AGM batteries with activated carbon negative electrodes, developed by Axion Power International (AXPW.OB), in an agreement anounced recently. This could at least serve the transition to more advanced batteries, Li-ion or some other chemistry, that are also affordable.

    seekingalpha.com/autho...

    They are a big improvement over standard lead acid batteries in terms of cycling etc. They have the advantage of affordability and U.S. manufacturing already in place for lead acid batteries, as well as established recycling, marketing etc.

    "i agree that the "greenies" (as you refer to them) are shooting themselves in the foot because of their lack of pragmatism wrt energy policy. their positions to back solar and wind at the expense of natural gas is, in fact, keeping us addicted to coal and oil"

    That is a ridiculous statement

    I do agree that some environmentalists are shortsighted in blocking solar development in the southwest, for example, and like most groups, can be wrong headed at times. However, to say that advocating for solar and wind is perpetuating our addiction to oil is absurd. And most of us who are advocating for renewables are ok with natural gas. While I hope we eventually get away from all fossil fuels, natural gas would be the last to go.
    You know damn well who is perpetuating our addiction to oil. Blaming it on renewable advocates is mistaking the fox for the hens.

    Wind and solar can be built 2-3 times as fast as the equivalent nuclear plants. We could have hundreds of gigawatts of cheap clean energy by the time the first nuclear plant gets built in a decade or more. By then, nuclear and "clean coal" will not be able to compete with solar and wind prices, which will all be in low to mid single digit cents/kWh, when nuclear and coal with CCS are in the mid teens cents/kWh.

    The power from solar thermal (CSP) with heat storage will be as valuable if not more valuable because of it's dispatchability. See article above from alternative energy stocks.com
    The NREL, while expecting the first handful of plants to be on the expensive side, thinks the costs will rapidly fall with experience and economy of scale.
    There are economies of scale that come with bigger CSP plants.
    Because of limited fixed costs in the main part of the plant, adding more collectors, and hence more power, has diminishing costs.


    Wind energy grew by the equivalent of 2 1/2 nuclear plants just last year in the U.S.. Ever hear of 2 1/2 nuclear plants being built in one year?
    And that's figuring in the 30% capacity factor for wind. 8.3 GW capacity growth.
    8.3 x .30 = 2.49 And the growth is just getting started. Even at last year's rate, that's 100 GW capacity in ten years.


    Alex Filonov
    "No technology is sustainable if it needs constant government support."

    You mean like the 90 years of subsidies that the oil industry has enjoyed? According to the leading authority on U.S. energy subsidies, not one subsidy has ever been phased out, since 1919.
    Oil gets $39 billion a year. - for the most profitable industry in the history of the world, and the largest and most powerful, and the answer to the question about who is encouraging our addiction.

    Fossil fuels in general get $49 billion a year. That's 3 times as much as the subsidies for all the renewables put together, that Obama wants.

    Nuclear power has been subsidized fo 50 years and $$ hundreds of billions.

    Subsidies are the worst argument imaginable against renewable energy. Especially at a time when our addiction to oil is also ruining our economy and has gotten us into two wars in two decades in the mid east.


    Apr 25 01:51 AM | Link | Reply
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    "Oil gets $39 billion a year"

    Please identify what the heck you're talking about?
    Apr 25 03:06 AM | Link | Reply
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    This one evaporates fast, can be used only as a long trade against short Crude Oil but not always, not all the months expirations.
    Will be interesting buy at $2.
    Apr 25 07:30 AM | Link | Reply
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    What's the point in making heavy weather of the oil peak and pushing gas when a gas peak might be right down the line? Closer even if the talk about a producers organization for gas goes anywhere. Just as important, if we see a sustained oil price over $100/b, then we will be looking at a sustained gas price of ______. I wont bother going into what the _____ could be, but it ain't nothing nice.

    The key thing with all this is that when oil and gas prices reach a certain level, then the concept of the peak becomes interesting. I tried to drum this into my students in Bangkok last year, but since most of them worked for oil companies and their bosses had told them that there is no such thing as 'peal oil', they refused to understand - although they made a nice attempt to pretend that they understood for their final examination.
    Apr 25 09:49 AM | Link | Reply
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    If it is logical and makes good policy I can assure you the vested interests will kill it. Or they will kill it so they can buy it up then adopt it (is that what is going on with natural gas now)
    Apr 25 10:00 AM | Link | Reply
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    AllanVonAltendorf: well, one subsidy for oil is the US military costs of fighting oil wars and securing oil deliveries around the world. another is the hidden cost of health care due to the effects of particulate smog. another has been the gov legislation and EPA egulation against natural gas and for coal and oil. another is low royalty payments to the US government (i.e. the taxpayer). if these "alternative" costs of coal and oil were included in the price consumers pay at the pump, the US would have switched to natural gas transportation decades ago. you should consider reading Hefner's excellent book for a much more thorough treatment of this subject.

    nat gas can't power aircraft or heavy equipment? with all due respect, that is simply a false statement. the port of LA is switching all their heavy freight trucks over to CNG. heavy hauling fleet vehicles that currently run on diesel are a perfect sector to replace with nat gas. natural gas was used to power airplanes decades ago:
    en.wikipedia.org/wiki/...

    commercial oil companies are being shut out and squeezed by governments? have you seen the earnings statements the past 5 years by the oil companies? pah-leeze...that is why i own them and continue to recommend their stocks as probably the only sector in US equity markets (other than perhaps gold) worthy of long-term holding!! if you are talking about nationalization by oil by foreign governments, you are supporting my case for basing US transporation on US produced natural gas! wrt getting gov out of the way, if the energy act of the late 70's hadn't been enacted, we'd all be on natural gas today. unfortunately, i dont agree that now we can afford to take a laissez-faire attitude for a number of reasons:
    1) coal and oil have been subsidized too long and are entrenched
    2) the "free markets'" have led to a 60% dependence on foreign oil
    3) the magnitude of the problem is now a crisis stage and requires the gov that created the problem to fix it
    4) the timeframe (next 5 years) in which it needs to be fixed is so short as to require drastic policy and industrial changes
    5) US consumers and business people are in general ignorant of the peak oil problem as well as the economic, environmental, and national security problems posed by our foreign oil addiction.
    all this even after $145/barrel oil.
    6) coal and oil interests are so powerful (and wealthy) that it will take government to crack the bondage US consumers are experiencing today

    ripskii: sure, you can buy "The GET" from hefner directly here:
    www.the-get.com/buynow...
    and thanks for posting the video. hefner is awesome. i wish he was secretary of energy instead of the numbskull Noble prize winner we have....

    frflyer: agree totally about shutting down coal. i am working on another article to quantify the amount of nat gas used to power half the cars and trucks in america and to replace half the coal plants. i want to compare it with proven US nat gas reserves. please look for it and comment on it if SA publishes it. i hope you are correct about the US not becoming dependent on asian battery makers, i have my doubts. my statement about environmentalist is not ridiculous. i did not say that solar and wind is perpetuating our addiction to foreign oil, i said they do so at the "expense of natural gas". wind and solar produce electricity, not gasoline, therefore wind and solar cannot take the place of the 70% of all US consumed oil in the transportation sector. therefore, when environmental "purists" lump nat gas into the same category fossil fuel as coal and oil, they mix the solution with the problem. how much have solar and wind reduced foreign oil imports? ZERO. my energy policy SUPPORTS wind and solar. my energy policy is also pragmatic about the size of the foreign oil problem, and fuels that can actually SOLVE the problem while we wait for solar and wind infrastructures to be built out to a significant capacity to power the EVs that COULD reduce foreign oil imports. just check the energy consumption numbers. it is clear, today, and for the next decade, only US produced nat gas can be scaled up to signficantly decrease foreign oil imports. by not supporting nat gas transportation, the environmental purists are defacto keeping us addicted to the CO2 and toxic particulate emissions of gasoline and coal. i stand 100% behind my statement. again, i did NOT "blame it on renewables" which i fully support, i blame it on a lack of pragmatism on the part of those who don't understand the magnitude of the problem. despite the growth in wind and solar you discuss, they represent less than 3% of US electrical generation. in addition, there are practically 0 EVs on the road. please tell me how we are going to reduce foreign oil imports over the next decade using wind, solar, and EVs? meantime, NGVs are ready to go TODAY as is the US produced nat gas needed to fuel them and we continue spewing CO2 and toxic particulates into the atmosphere due in part to environmental "purists" lack of understanding of the entire problem and capable solutions.

    ferdinand: if you don't believe the recent nat gas production numbers and reserve discoveries in US shales, please read hefner's book about the abundant supplies of natural gas in the US and the world.

    dcb: we have no choice but to adopt nat gas transportation. it will either happen intelligently pre peak oil crisis (we saw phase 1 of what peak oil can do in 2008 with $145/barrel oil), or, we can wait until we have riots in the streets in which case the transition to nat gas transportation may be impossible to make. i wish people were "buying up" nat gas...maybe then it wouldn't be trading under $3.26 per MMBtu and my COP would take off like it should...
    Apr 25 10:48 AM | Link | Reply
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    Michael: Do you like UNG for a natural gas play? My only concern is that if oil sky rockets, the economy will tank, taking equities such as COP and other energy stocks down with it. The same applies to USO. Do you agree?
    Thanks for the excellent articles.
    Apr 25 10:52 AM | Link | Reply
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    my fuel of choice are the words to motivate my angry black masses. i tell my followers, always, "not just oil--but all of it will come to you."
    Apr 25 11:11 AM | Link | Reply
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    hi fitz
    even though i don't care for more legislation i am convinced you are a patriotic guy that wants the best for the u.s.. yeah i know i'm one of those minimal govt types.
    about a year back? rentech seemed to show some promise for much cleaner coal (diesel) fuel at about $60 a barrel. i would be interested in your thoughts on rentech. it seems in my amatuer view that this would make another good alternative if it is reasonably clean. also it seems in less need of subsidy.
    have to agree that oil production is not going to keep up if the economy starts to improve.
    do you like the idea and numbers on algae oil?
    politically i guess we both are left out and can probably agree that the "2" parties need a swift kick in the pants and the rise of a couple of more would be beneficial to our country.
    Apr 25 11:23 AM | Link | Reply
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    This is what the heck I'm talking about.

    www.heatisonline.org/c...

    "subsidy programmes from 1918 are still in place"
    "I'm not aware of any oil and gas subsidy that has ever been phased out," said Koplow, the leading expert on U.S. energy subsidies"

    "in a time of skyrocketing oil prices and profits, why did the George W. Bush administration in 2005 authorise an additional 32.9 billion dollars in new subsidies over a five-year period?"

    "Koplow's 2007 report to the Organisation for Economic Cooperation and Development puts the annual U.S. subsidy at an average of 39 billion dollars a year, when the costs of guarding oil lanes in the Persian/Arab Gulf, and the Alaska Pipeline are included. This does not include any costs from the Iraq war"

    "Estimating U.S. oil and gas subsidies is very challenging. Subsidies rarely involve cash payments. Instead scores of U.S. government agencies and departments create hundreds of programmes to support the U.S. energy sector. And there is no requirement for the federal government to keep track of all this."

    "Energy subsidies are often simply hidden from public scrutiny. It's only recently been revealed that 40 companies granted leases between 1996 and 2000 for drilling in the Gulf of Mexico do not have to pay royalties for the publicly-owned resource. This is worth nearly a billion dollars a year in lost revenue to the federal government, according to a 2008 study by Friends of the Earth (FOE), a U.S. environmental NGO, and may ultimately total 50 billion dollars."
    These production subsidies do nothing to lower the price of petrol at the pump for U.S. consumers. It simply boosts companies' bottom line, Pica said.

    "This massive government intervention distorts energy markets, making it very difficult for alternative energy sources to compete without similarly massive subsidies. "And it promotes America's addiction to oil," Larsen added."

    www.setamericafree.org...
    This link shows even more subsidies to fossil fuels. I chose the lower numbers fro Koplow
    Apr 25 11:39 AM | Link | Reply
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    Glad that someone else sees what is actually happening here.
    Pickens is simply supporting switching to NG in order to drive up the value of his wind assets/plans (by increasing the price of electricity) When the price of NG turns it will make oils' run-ups look tame.


    On Apr 25 10:00 AM dcb wrote:

    > If it is logical and makes good policy I can assure you the vested
    > interests will kill it. Or they will kill it so they can buy it up
    > then adopt it (is that what is going on with natural gas now)
    Apr 25 11:44 AM | Link | Reply
  •  
    Airplane, not airplanes (plural), and it flew on "standby" kerosene while pretending to demonstrate LNG that never worked. Low speed lifters in the Port of LA will operate in a small, flat, price-no-object setting. You could probably run them on used vegetable oil gathered from McDonalds (which btw is another local government wheeze, in New York, making the stinkiest biodiesel on earth at twice the price).

    Michael, I don't fault you for pushing natgas as a transportation fuel. There's a large installed infrastructure of retail CNG in Holland and Belgium. I drove a gas-powered VW Golf. Worked fine on flat roads and short distances. I can see building out a similar retail network in Texas, Louisiana, parts of Indiana and Illinois. I think you might be successful in pushing policy (tax breaks) with Boone Pickens and the gas producers and pipeline companies on your side. The Battelle Memorial Institute is a resource. They're DOE experts on gas storage subsurface.

    Conoco? Can't comment because of confidentiality.
    Apr 25 12:16 PM | Link | Reply
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    Mike
    I'm not disagreeing with you on natural gas use and it's ability to reduce oil imports.
    Transportation, particularly personal transportation, seems to be the hardest nut to crack. I'm for whatever will work to both get us off imported oil, and reduce emissions significantly. However, even given the present small percentage of power supplied by solar and wind, I still think they can be built up rapidly to be major contributors in the next decade and beyond.

    Part of the problem is that too many people don't understand the magnitude of what needs to be done to solve the energy problem and mitigate global warming. This includes some environmentally inclined people, who think that if we all just live green and improve our carbon footprint, all will be well. See the articles at Climate Progress on core climate solutions to understand the scope of the task. Even if you don't agree with the selection of solutions there, it's a good starting point for discussing what needs to be done. And an indication of how much the political will to act needs to be improved on.

    climateprogress.org/20.../
    They do include nuclear and natural gas.

    On the other side of the argument, too many Republicans think that Drill baby drill and nuclear are the only answers, and block all attempts at developing renewables, clinging to old cannards about how solar and wind can't ever amount to much. The vast majority of Republicans and Libertarians still think they are smarter than the 97-99% of climate scientists and every single major scientific organization in the world, who agree with AGW. The vast power of the oil companies is what is perpetuating those myths, and paying big money to confuse the public on the issue. But we are supposed to believe that the entire world scientific community are the ones who are trying to fool us, in some dark conspiracy. How naive can people be?
    That is what is doing the most harm and preventing us from getting off the imported oil and solving the climate problem.
    You used the word ludite. Look no further.

    Apr 25 12:34 PM | Link | Reply
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    Fitz: Thanks for the info on how to get the book. It's on order. You are correct about aviation fuel. I found it ironic that early in the cycle of increasing oil prices that only the USAF seemed aware of the looming potential shortage of jet fuel.

    www.sciam.com/article....

    www.flightglobal.com/a...

    Quite a lot is going on with aviation gas too, mostly to learn how to remove the lead from 100LL and yet support the needs of piston power aircraft.

    www.swiftenterprises.c...

    Butanol is another fuel that has good potential for both aviation and automotive applications since it can be directly mixed into the present feed stocks and has high energy content per unit weight, a critical factor for aviation fuel.

    peswiki.com/index.php/...
    Apr 25 12:44 PM | Link | Reply
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    @ frflyer, guarding the Persian Gulf, Indian Ocean, China Sea, etc serves Kuwait, Saudi Arabia, the Emirates, Germany, Japan, South Korea. It's a global geopolitical thing. I don't like it any more than you do. But it's not a subsidy, unless you want to debit Exxon a slice of the Strategic Air Command nuclear deterrent, Navy hunter-killer subs and a chunk of NASA for deploying geoimaging and communication satellites. Oops, I forgot USGS and MMR.

    Sigh. Okay, let's agree it $39 billion. That's 2% of $2 trillion revenue and an incentive to explore marginal prospects. Between 1981 and 2006, U.S. Federal and state governments collected $1.65 trillion in total taxes after adjusting for inflation. That is 65 percent more than the combined earnings of the 16 largest domestic oil companies during the same period. These figures do not include income taxes paid to foreign governments on profits earned in those countries. EIA data indicates that domestic oil companies paid $518.9 billion in income taxes to foreign governments between 1981 and 2006.

    Oil company 2008 earnings (net income/sales) averaged 5.7%. ROI underperformed S&P Industrials every year since 1986. If you tax oil or change the rules about writing off G&G and completion, the only thing you'll achieve is higher retail prices. The combined burden of federal, state and local gas taxes cost American drivers an average of 45.9 cents on every gallon purchased in 2006.
    Apr 25 12:49 PM | Link | Reply
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    @ frflyer, guarding the Persian Gulf, Indian Ocean, China Sea, etc serves Kuwait, Saudi Arabia, the Emirates, Germany, Japan, South Korea. It's a global geopolitical thing. I don't like it any more than you do. But it's not a subsidy, unless you want to debit Exxon a slice of the Strategic Air Command nuclear deterrent, Navy hunter-killer subs and a chunk of NASA for deploying geoimaging and communication satellites. Oops, I forgot USGS and MMR.

    Sigh. Okay, let's agree it $39 billion. That's 2% of $2 trillion revenue and an incentive to explore marginal prospects. Between 1981 and 2006, U.S. Federal and state governments collected $1.65 trillion in total taxes after adjusting for inflation. That is 65 percent more than the combined earnings of the 16 largest domestic oil companies during the same period. These figures do not include income taxes paid to foreign governments on profits earned in those countries. EIA data indicates that domestic oil companies paid $518.9 billion in income taxes to foreign governments between 1981 and 2006.

    Oil company 2008 earnings (net income/sales) averaged 5.7%. ROI underperformed S&P Industrials every year since 1986. If you tax oil or change the rules about writing off G&G and completion, the only thing you'll achieve is higher retail prices. The combined burden of federal, state and local gas taxes cost American drivers an average of 45.9 cents on every gallon purchased in 2006.
    Apr 25 12:49 PM | Link | Reply
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    Sorry about the double post. And there's a typo: MMS, not MMR.
    Apr 25 01:09 PM | Link | Reply
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    Why isn't it enough to say the LNG comes from our own country, while oil comes from elsewhere? This is not an isolationist argument. We all seem to agree that our dependence on foreign oil is unhealthy. WE have another alternative. USE IT!
    Apr 25 02:50 PM | Link | Reply
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    well we knew in 1973-1980 that we needed a comprehensive national energy policy but then in 1981 the idea got squashed for political reasons.
    > jack
    Apr 25 03:45 PM | Link | Reply
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    NG prices are going to 1997 levels and are going to stay that way for a while. Supply: shale and LNG (there's too much gas) Demand: global deflation. Neither the President nor Congress have shown any interest in helping domestic O&G producers by supporting Nat Gas--after all, why would you want to help your political foes? See in more detail: www.thebarricadeblog.c...
    Apr 25 04:32 PM | Link | Reply
  •  
    One point in your plan seems oddly out of place IF the objective is to drastically reduce dependence on oil in general and gasoline in particular, and that is the recommendation to cease building coal-fired power plants. Your social engineering suggestions also smack more of ideology than of offering a practical solution to a given problem. But then, when people go to your personal website/blog they can see that you are kind of "out there" in some of your political views. You are entitled to your views, of course, but sometimes I think your analysis loses objectivity and utility because of them. If our predicament is as dire as you suggest -- and I tend to agree with you that it is -- then we can't afford the luxury of ruling out the use of coal with pollution-mitigation technologies that exist today.
    Apr 25 04:40 PM | Link | Reply
  •  
    It is the responsibility of any writer to spell out an acronym the first time it is used. Because I have no idea what CNG and LNG stand for, I cannot make sense of much of this article. That's no way to win friends and convert enemies.
    Apr 25 06:11 PM | Link | Reply
  •  
    cng = compressed natural gas.
    lng = liquefied natural gas.
    > jack
    Apr 25 07:09 PM | Link | Reply
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    The problem is that it makes sense...and somehow our government and/or the ordinary person just doesn't get it...They'd rather wear themselves out and break the bank fighting for windmills...like DonQuixote...not that I have anything against windmills. There is just a little problem with technology/costs/viabi... for the whole nation/etc. etc. etc. People just don't get natural gas ... and that's a real shame.
    Apr 25 09:03 PM | Link | Reply
  •  
    hi jimp: US natural gas prices right now are very interesting. the traditional oil/natgas price relationship has been invalidated due to huge new shale supplies. compounding the new supplies has been the severe drop off in industrial and even home heating demand for nat gas. so, we have a double whammy reflected in today's very low price. now, in response to low prices, the baker huges US drilling count has plumetted. an additional factor to consider is that shale wells have higher depletion rates than so called associated gas wells. and then of course the seasonal demand. i know i didn't answer your question directly, but that is the best i can do. without a natural gas transportation policy, i think the US natgas market will yo-yo just like the world economy...all based on being addicted to oil in the era of peak oil.

    LKofScotland: is that some celtic riddle? i don't get it.

    fireball: well, thanks i like to think i am patriotic and do obviously want the best for my country. i like to remind the bush laissez-faire group that it was under bush that led us to the US government effectively nationalizing the US mortgage, insurance, banking, and financial industries. so, all is definitely not as it seems. from an investment perspective, if you agree with robert hefner's opinions (and logic to substantiate them) all of these attempts to "make" liquid fuels (ethanol, biofuels, coal gasification, etc) will ultimately due to a number of reasons: either economics, food inflation, water consumption, dependence on refining with foreign oil...something. and the question is, why do it when clean, cheap, and abundant natgas is readily available? so, no, i cannot recommend those types of investments. i agree, the two party system is completely broken. i recommend the 50 states calling a constitutional convention (as is their right), abolish the US government except for the original constitution and bill of rights and start over from scratch.

    frflyer: excellent post!!

    FredW: people who are against natgas transportation simply because of their dislike of pickens are not well informed. here are the facts:
    - Chesapeake Energy is the largest producer of natural gas in the country, and they merely produce 3% of the total.
    - BP and COP are the next biggest suppliers of natural gas. so, they top three producers supply much less than 10% of the total natural gas productions
    - the backbone of US natural gas production is hundreds if not thousands of small independent outfits
    - the real winners in a natgas centric transporation policy would be the thousands of farmers and landowners who would get the nat gas royalties instead of those american dollars going to foreign oil suppiers.
    to cut down an american like pickens in order to support foreign oil suppliers is ...well...with all due respect, idiotic (assuming you are an american). the price of NG will not run up like oil because NG is abundant - please read robert hefner's book for the whole story. meantime, consider exchanging your dislike of pickens in order to support what is good for the country you live in.

    AlanVonAltendorf: well, i guess we just disagree. waste management trucks that hall tons of trash run on nat gas just fine. long haul trucks that carry very large loads run on nat gas just fine. these are just facts, so its pointless to argue them is it not?
    COP confidentiality? so you work for COP? please then, explain to me why Mulva is not pounding the table for nat gas transportation after he made huge investments in US nat gas properties (burlington resources) and australian properties (origin)? this makes no sense. his company is taking it in the shorts financially because of its large exposure to nat gas, and yet he leaves it to the CEO of chesapeake to do all the policy talking. i have lost alot of respect that i used to have for mulva over this issue. as CEO of the 3rd largest US oil company, and a man who stood up at the WEF at davos a few years ago and said that worldwide oil supply will not keep up with worldwide oil demand by 2015, why the heck is he so quiet on natgas transportation? doesn't make sense.

    frflyer: yes i agree, but what about the next 10 years?? that is the point. peak oil is going to hit bigtime in that 10 years, and waiting for solar and wind to build out before we DO something will lead to economic disaster. i certainly agree with the first sentence of your second paragraph...as the article points out, 70% of US oil goes to transportation. we simply cannot reduce this amount unless we get cars and trucks off of gasoline and onto something else. no other US produced fuel can be scaled up to reduce foreign oil imports over the next 10 years like natgas. it's that simple. i did not use the word ludite, someone else did.

    ripskii: it's wonderful that you ordered the book - it is a mind expanding read i tell ya that. and yeah, the US air force has been worrried bigtime about jet fuel supply since the original arab oil embargo. btw, i read somewhere that the US military uses 0.7% of the entire world's oil production every day.

    AlanVonAltendorf: oil wars aren't a subsidy?? wrt oil companies, hopefully obama is not stupid enough to enact windfall profits taxes (then again, he's stupid enough to say "clean coal" all the time). if he does, the majors will simply do what they did before: protect shareholders by reducing E&P expenses and this means less oil produced by US majors. now that i think about it, that's probably what obama WILL do. it seems like Washington does whatever will weaken the middle class the most. btw, you do agree that windfall profits taxes on big oil companies is a different issue than taxing gasoline itself as a revenue generator, right? btw, if you do work at COP, or consult for them, please read the next article i am working on (if SA publishes it) with respect to nat gas supply/demand and comment on it if you find mistakes.

    veryold: very old and very wise, nice post!

    jack gordon: yeah, the energy act happened in the late 1970's that prohibited building nat gas electric generators and from new industrial buildout. it was later repealed, but the addiction to coal began and we never recovered. you should read robert hefner's account of the testimony given in front of congress that led to such terrible legislation.

    BuckEast: you may well be correct in your prediction. that said, rig count is dropping like a rock and shale depletion rates are typically much higher than associated nat gas. it is going to be interesting to see what happens.

    JoePublic: last i checked, coal-fired power plants produce electricity..not gasoline, so i don't understand your logic. by "social engineering" are you referring to my suggestions to control population growth, for local sustainability, and for green power? if so, guilty as charged (but i firmly stand by those recommendations). perhaps i am "out there", but if i am "out there" what do you call people who supported bush and the subsequent taking away of our rights, the wrecking of the economy, the huge debt, the oil wars, and the nationalization of the US mortgage, insurance, and financial industries under his watch? are those folks "in there"? if so, i am glad i am "out there". at the end of the day though, my big disagreement with you centers on this: you support coal; and i think it is an abomination that we are using coal instead of nat gas. it makes no sense economically, environmentally, and at the end of the day morally.

    hghodges: i apologize, i made a bad assumption that people who read articles already know those terms. sorry, here are the defs:
    CNG: compressed natural gas
    LNG: liquid natural gas

    thanks jack.

    bye now, have a nice weekend and thanks for reading and posting.
    Apr 25 09:04 PM | Link | Reply
  •  
    Hi Fitz, Incorporating a near term goal in your plan as I have suggested is a necessary addition, since it drives out pie in the sky alternatives. What many of the folks who look at the energy problem don't do is relate it to our economic structural problem. What should alarm every citizen is the fact that our operating cash flow as a country na
    Apr 25 09:09 PM | Link | Reply
  •  
    JanThaw: yup. it's ironic to me that a country that has MIT, CalTech, GeorgiaTech, Stanford..the list goes on and on...is represented by politicans and policymakers that couldn't find their *$$ in a telephone booth with both hands. ultimately, this is china's greatest strength: their government is primarily made up of engineers (who are, btw, taking advantage of low crude prices to buy up oil assets the world over) while we are represented by career politicians most of whom are lawyers and couldn't care less about a Btu or natural gas technology or, evidently, foreign oil dependence. all that matters is getting re-elected and seeing how much under the table money you can collect by supporting the "right" legislation...
    Apr 25 09:10 PM | Link | Reply
  •  
    Sorry about the glich, our operating cash flow as a country has been increasingly negative since1991. On top of that we are running increasingly negative domestic budgets. For the most part, we borrow the money to balance our budget from the countries who have positive operating cash flows like China,the Mid east oil producers and some countries in western europe. If a company keeps having this situation it would probably file for bankruptcy. As you have pointed out, a significant contributor to this economic problem is energy import. The current administration can't seem to get to the heart of the ultimate problem and therefore thinks that greenhouse gas is the real imminent threat to the future of the US and that they have 30 years to solve the problem. Unfortunately, if the USA doesn't solve the basic cash flow problem in the next ten years, the whole environmental issue might be academic as far as the quality of life for our progeny is concerned. Replacing today's electrical generation capacity with natural gas generated electricity will reduce green house gases but won't help our cash flow as a country. That is why we need to work the gasoline part of the problem first. The president is still talking about clean coal but I believe this a political gambit to assuage the miners and other workers. The trurth is that he knows that replacing the coal-fired facilities is not even close to the horizon. I was surprised by your transportaion oil usage, I thought it was 40% of our total usage, maybe that was only for passenger cars. Today's electrical generation from wind and solar is less than !% of the total and the president's goal is to double this in three years, hardly a sense of urgency, hence fitz's comment that insisting on relying on this form of energy will only lead to more green house gases in the foreseeable future. We had a golden opportunity to step up the introduction of solar and wind with a focused Gov plan and stretch goals for five and ten years but chose to buckshot the money into a myriad of things with no focus,no concrete goals and a relatively naive set of objectives that satisfy single variable constituencies. This may be good politics, but it isn't solving our critical problem. By the way supplanting importation of oil for the importation of lithium won't solve our problem either. I believe that the conversion to gas fueled vehicles will pick up momentum in spite of the Government. As you have stated trucks which enter the port of Long Beach must be natural gas powered, AT&T has announced a 600 m+ program to convert and refleet their commercial vehicles to natural gas powered and some few states are moving that way. Long Beach by the way is the port of entry of about 60% of imported goods from the far east and a major entry point for Walmart's goods.Getting Walmart to convert their trucks to natural gas would really be a green initiative.
    Apr 25 09:53 PM | Link | Reply
  •  
    Sorry about the glich, our operating cash flow as a country has been increasingly negative since1991. On top of that we are running increasingly negative domestic budgets. For the most part, we borrow the money to balance our budget from the countries who have positive operating cash flows like China,the Mid east oil producers and some countries in western europe. If a company keeps having this situation it would probably file for bankruptcy. As you have pointed out, a significant contributor to this economic problem is energy import. The current administration can't seem to get to the heart of the ultimate problem and therefore thinks that greenhouse gas is the real imminent threat to the future of the US and that they have 30 years to solve the problem. Unfortunately, if the USA doesn't solve the basic cash flow problem in the next ten years, the whole environmental issue might be academic as far as the quality of life for our progeny is concerned. Replacing today's electrical generation capacity with natural gas generated electricity will reduce green house gases but won't help our cash flow as a country. That is why we need to work the gasoline part of the problem first. The president is still talking about clean coal but I believe this a political gambit to assuage the miners and other workers. The trurth is that he knows that replacing the coal-fired facilities is not even close to the horizon. I was surprised by your transportaion oil usage, I thought it was 40% of our total usage, maybe that was only for passenger cars. Today's electrical generation from wind and solar is less than !% of the total and the president's goal is to double this in three years, hardly a sense of urgency, hence fitz's comment that insisting on relying on this form of energy will only lead to more green house gases in the foreseeable future. We had a golden opportunity to step up the introduction of solar and wind with a focused Gov plan and stretch goals for five and ten years but chose to buckshot the money into a myriad of things with no focus,no concrete goals and a relatively naive set of objectives that satisfy single variable constituencies. This may be good politics, but it isn't solving our critical problem. By the way supplanting importation of oil for the importation of lithium won't solve our problem either. I believe that the conversion to gas fueled vehicles will pick up momentum in spite of the Government. As you have stated trucks which enter the port of Long Beach must be natural gas powered, AT&T has announced a 600 m+ program to convert and refleet their commercial vehicles to natural gas powered and some few states are moving that way. Long Beach by the way is the port of entry of about 60% of imported goods from the far east and a major entry point for Walmart's goods.Getting Walmart to convert their trucks to natural gas would really be a green initiative.
    Apr 25 09:53 PM | Link | Reply
  •  
    I totally disagree with your condemations. Ignoring or banning ( as the greenies would have it) anything that involves carbon , especially natural gas, is as short sighted and wrong as you can get. We should be shouting for joy at our abundance of natural gas and its very reasonable use as a bridge to the future of less and less carbon fuels. Building an electric car and increasing electric distribution lines without realizing that increased carbon will be burned to power those electric cars, is ridiculous. I have read that as much as 2/3 of the electricity sent through power lines to your home is lost to the atmosphere and heat. No natural gas is lost, in comparison. We need neighborhood NG electric generators to supplement solar and wind. And, does anyone care about the 700 billion a year shipped overseas to purchase energy? Use NG and keep the money to build more renewable energy at home.


    On Apr 25 01:51 AM frflyer wrote:

    > The idea of running cars on NG or hybrid NG/electrics has a lot going
    > for it. My initial thought, when I heard of Picken's plan, was that
    > NG PHEVS would be a great combination, with quite low emissions.
    >
    > But there are other things to at least consider
    >
    > What about the argument that as far as powering cars, NG is almost
    > twice as efficiently used in power generation to run electric cars,
    > than using NG in cars?
    > climateprogress.org/20.../
    >
    >
    > Is there enough NG to run cars without shutting down gas power plants?
    > Because shutting down gas plants and letting coal plants run makes
    > no sense. Increasing efficiency of power plants would
    > save
    >
    > While the article focuses on ending oil imports, which is a good
    > thing, we should also be focusing on phasing out dirty coal plants.
    >
    >
    >
    >
    > Mad Hedge Fund Trader
    >
    > "Wind and solar alone won’t work on still nights"
    >
    > True, except for CSP with heat storage, which can run at night with
    > valuable dispatchable power, and with far cheaper energy storage
    > than batteries. Also, there is a lot to be said for the option of
    > combining NG firing with solar plants, like the NREL pilot plants
    > in the Mojave. CSP is already the cheapest solar power and will become
    > much cheaper in the near future.
    >
    >
    > www.altenergystocks.co...
    >
    >
    > www.nrel.gov/csp/troug...
    >
    >
    >
    > If John Peterson is right (series of articles at Seeking Alpha),
    > and advanced lead acid batteries are a cost effective choice for
    > hybrids, PHEVs etc, then we can avoid the dependence on Asian battery
    > imports. Exide (seekingalpha.com/symbo... to manufacture
    > and sell AGM batteries with activated carbon negative electrodes,
    > developed by Axion Power International (seekingalpha.com/symbo...),
    > in an agreement anounced recently. This could at least serve the
    > transition to more advanced batteries, Li-ion or some other chemistry,
    > that are also affordable.
    >
    > seekingalpha.com/autho...
    >
    > They are a big improvement over standard lead acid batteries in terms
    > of cycling etc. They have the advantage of affordability and U.S.
    > manufacturing already in place for lead acid batteries, as well as
    > established recycling, marketing etc.
    >
    > "i agree that the "greenies" (as you refer to them) are shooting
    > themselves in the foot because of their lack of pragmatism wrt energy
    > policy. their positions to back solar and wind at the expense of
    > natural gas is, in fact, keeping us addicted to coal and oil"
    >
    > That is a ridiculous statement
    >
    > I do agree that some environmentalists are shortsighted in blocking
    > solar development in the southwest, for example, and like most groups,
    > can be wrong headed at times. However, to say that advocating for
    > solar and wind is perpetuating our addiction to oil is absurd. And
    > most of us who are advocating for renewables are ok with natural
    > gas. While I hope we eventually get away from all fossil fuels, natural
    > gas would be the last to go.
    > You know damn well who is perpetuating our addiction to oil. Blaming
    > it on renewable advocates is mistaking the fox for the hens.
    >
    > Wind and solar can be built 2-3 times as fast as the equivalent nuclear
    > plants. We could have hundreds of gigawatts of cheap clean energy
    > by the time the first nuclear plant gets built in a decade or more.
    > By then, nuclear and "clean coal" will not be able to compete with
    > solar and wind prices, which will all be in low to mid single digit
    > cents/kWh, when nuclear and coal with CCS are in the mid teens cents/kWh.
    >
    >
    > The power from solar thermal (seekingalpha.com/symbo...)
    > with heat storage will be as valuable if not more valuable because
    > of it's dispatchability. See article above from alternative energy
    > stocks.com
    > The NREL, while expecting the first handful of plants to be on the
    > expensive side, thinks the costs will rapidly fall with experience
    > and economy of scale.
    > There are economies of scale that come with bigger CSP plants. <br/>Because
    > of limited fixed costs in the main part of the plant, adding more
    > collectors, and hence more power, has diminishing costs.
    >
    >
    > Wind energy grew by the equivalent of 2 1/2 nuclear plants just last
    > year in the U.S.. Ever hear of 2 1/2 nuclear plants being built in
    > one year?
    > And that's figuring in the 30% capacity factor for wind. 8.3 GW capacity
    > growth.
    > 8.3 x .30 = 2.49 And the growth is just getting started. Even at
    > last year's rate, that's 100 GW capacity in ten years.
    >
    >
    > Alex Filonov
    > "No technology is sustainable if it needs constant government support."
    >
    >
    > You mean like the 90 years of subsidies that the oil industry has
    > enjoyed? According to the leading authority on U.S. energy subsidies,
    > not one subsidy has ever been phased out, since 1919.
    > Oil gets $39 billion a year. - for the most profitable industry in
    > the history of the world, and the largest and most powerful, and
    > the answer to the question about who is encouraging our addiction.
    >
    >
    > Fossil fuels in general get $49 billion a year. That's 3 times as
    > much as the subsidies for all the renewables put together, that Obama
    > wants.
    >
    > Nuclear power has been subsidized fo 50 years and $$ hundreds of
    > billions.
    >
    > Subsidies are the worst argument imaginable against renewable energy.
    > Especially at a time when our addiction to oil is also ruining our
    > economy and has gotten us into two wars in two decades in the mid
    > east.
    >
    >
    Apr 26 12:50 AM | Link | Reply
  •  
    We have to be careful of a wide move to NG. People focus on the reserves created from shale, but there are sobering realities in their decline curves. The Barnett has arguably reached it peak production, and is now a mature field. The Haynesville and Marcellus may only carry us so far. Perhaps a decade or two. Then we will enter serious reserve declines. This may even occur more quickly if you factor increased demand from policy shifts.
    Apr 26 01:28 PM | Link | Reply
  •  
    I'm re-posting my comment from another article a few days ago here, where it actually fits the discussion better:

    "The "other" electric car starts to sound more reasonable in the long term. The "other" is the hydrogen fuel-cell powered electric car. Yes, I know, the production and distribution infrastructure needed is immense, but in the long run sounds more feasible in light of Mr. Lifton's arguments. " (Those were arguments against the viability of economical Li-ion batteries over the long term due to supply constraints).

    "My personal "grand energy plan" has always been and still is based on nuclear energy. Nuclear plants would be designed and built as three-way machines. A three-unit plant would have one reactor for electricity, one for reverse osmosis clean water production, and one for electrolytic hydrogen production. Crossover capability would allow all three reactors to produce power for peak time of day, but would divert increasing power to the hydrogen and water trains as night fell. At that point, the vast available clean baseload of two reactors produces clean water and hydrogen gas all night with (of course) zero CO2 production. In the battery EV scenario, as discussed in previous SA articles, the nightime charging of all those extra batteries would have to come from more baseload coal plants, which makes your battery car dirtier, despite the efficiency gained from the inherent electric motor high energy conversion efficiency. What battery EVs there are would also retain their "CO2 cleanliness" if the nightime charging were from new nuclear baseload units, which run at 100% all night anyway (no one really does nuclear "load following" and they aren't designed for that).

    Building nuclear plants that can cleanly fill in the nighttime demand valley with massive fresh water and hydrogen production, while at the same time giving a clean charge to the battery EVs, is an alternative whose time will have to come."

    Back to now: I will add that I am very pro-solar and pro-wind power and heavily invested in both. But for power-intensive applications like the H-2 production and water desalination, large centralized clean power sources (i.e. nuclear) hooked directly to the water and hydrogen production units, obviates the need for transmission lines which, with their associated expense and line losses, rule out practical use of solar and wind in this application. When you spread the cost for these 3-way nuke plants over the 60-year design lifetime (which is the life for both new plants and existing ones getting life extensions from 40 to 60 years), the clean water and hydrogen can be produced economically. Most people have no idea just how much you can do with 1000 MW of CLEAN power produced for 60 years at a 90+% capacity factor, from a footprint the size of a few football fields.
    Apr 26 04:48 PM | Link | Reply
  •  
    Fitz: I just received a reply to my letter urging my congressman to support HR 1835 that resulted from one of your prior articles on that subject. He is fully on board and a cosponsor of the bill. He clearly understands the big picture on our energy situation, the need to take a multifaceted approach and how important NG is in the mix. He also liked my request to push the IFR nuclear reactor technology to achieve clean low cost base load power while disposing of the long half-life waste from current reactors. It is refreshing to learn that at least someone in our congress actually gets it! Hopefully there are others.
    Apr 26 07:07 PM | Link | Reply
  •  
    ripskii
    I think people are gradually becoming more aware. Some recent polls indicate 59% of Americans are in favor of nuclear power, and that's based on the average excruciatingly low level of knowledge about existing LWRs.

    We all know that for transport apps, NG could help on a near-term relative scale, but not an absolute scale of CO2 emissions (for both baseload power and transport apps). The other nuclear technology that (combined wih reprocessing) makes sense from a non-proliferation aspect is the Canadian CANDU design, which runs on natural (unenriched) uranium. The beauty of CANDU is that you can say to states aspiring to have commercial nuclear "Use this technology and you don't need enrichment. Therefore, if you honestly just want the power, you can have it, but if you enrich, then we know you want weapons grade uranium". It's a differentiator that would allow obvious distinction of the intentions of the user country.

    Being a nuclear engineer by trade, I love the IFR concept, but it's something that I would want only countries with pre-existing , high level operational experience to indulge in, at least at first. In grad school 25 years ago I wrote a paper on disposing of HLW by dropping it into the Mariana's trench, (the 35,000 ft depth) where subduction would carry it ever downward, into the deep mantle, forever recombined harmlessly with mother earth. One can enhance the process by concentrating the waste to a point where the surface temp of the waste container would exceed the local melting point of the surrounding mud/rock. I used titanium carbide spheres, and the resultant downward melting ablation (above 4 Ci/cc Cs-137 equivalent) resulted in the waste spheres traveling 18 miles into the sub-surface before the decay fell off to sub-melt temperatures. The ablated material above re-solidifies into a glass-like cap, so the whole process self-seals its own pathway behind it. I know Sandia Labs was looking at this, because my prof (from Sandia) had all the necessary parameters to do the calculations.

    Of course this may seem off-base given the CNG subject of the article, but given my prior post above on H2 and H20 production from nuclear power, it's all part of the overall conversation.

    SA provides a wonderful venue for open thought that goes beyond the underlying investment opportunities. I commend everyone who participates with an open mind and without negativity.

    Apr 26 10:10 PM | Link | Reply
  •  
    You never heard of mass transit?

    solves the balance of trade problem

    solves private affordability issues

    solves pollution issues

    cuts health services costs

    cuts police man-hours needed

    saves sittingn-in-gridlock man-hours

    supplants corrupt overreliance on cars, multi-dollars per
    passenger mile, tax-funded roads, traffic control with
    per passenger-mile far more efficient transportation,
    thus beginning to just catch up with other nations
    Apr 27 01:32 AM | Link | Reply
  •  
    OldWizard: i definitely agree with you that US policymakers apparently place environmental concerns over peak oil concerns, and that the urgency of peak oil is much greater! though, i do agree the environmental problem is real and large too. i also agree with your opinion that if we don't solve the oil issue it won't matter what happens with the environment because the quality of life will be ... well...bad (to put it mildly). and yes, thank god the port of LA, state of Utah, AT&T, and some other enlightened entities are adopting natural gas transportation. i just wish the adoption would go faster and that the president and energy secretary would get on board. like i have been saying, we will be forced to adopt nat gas transportation one way or another...crisis, or with intelligent planning...i favor the latter.

    realold: good point about losses (electrical vs nat gas). i never thought about that before. thx.

    tsra1983: good post - i think you will like my next article (now on instablog) wrt nat gas demand and supply requirements for adopting this nat gas centric energy policy. i talk about the haynesville reserves, and how long that field alone could supply the entire US nat gas demand. interesting stuff. i would be interested in your comments to that article if you have the time.

    dave marsh: in the long run, i think the world (if it survives til then) will revolve around hydrogen energy. i too support nuclear, but only as much as needed to reduce coal and to make up what nat gas and solar and wind cannot accomplish. i wish i thought nuclear was as CLEAN as you do...i am not convinced. there are still some waste problems as far as i know. that said, i think i am leaving the natural gas world and embarking on some of the newer nuclear technology and plant design. i'm not getting anywhere with the nat gas work anyhow...no one with any power listens and/or acts.

    ripskii: good action!! thanks and great job.

    dave marsh: thanks for the nuclear waste disposal discussion - fascinating.
    Apr 27 01:38 AM | Link | Reply
  •  
    seedontbelieve: mass transit is indeed a bullet in my energy policy:

    "Develop electric and natural gas powered mass transit for people and goods."

    that said, a pragmatic look at existing US demographics, geographic dispersion, and average work day commutes leads me to believe that while mass transit has great promise in metropolitan areas, there would be many regions of the US where the economics of mass transit would not make sense and where people still rely on cars and trucks. i want those cars and trucks on US produced nat gas instead of gasoline from foreign oil. thx.
    Apr 27 01:46 AM | Link | Reply
  •  
    Fitz: re "subsidies" to oil companies. You listed "low royalties" as a subsidy. I disagree with this completely but here's but a piece of my rationale: COP and BP are the #2 and #3 NATURAL GAS producers in the U.S. Their number one gas producing field is the San Juan Basin, and a very large percentage of that natural gas comes from Federal Lands with those "subsidized" low royalties!! Those royalties were agreed to many years ago and are part of a contract. The contract was negotiated and were based on the going market rates. Same for offshore. Now, the "market" for royalties has gone up over the years, but do you contend that we need to dissolve the contracts that were previously signed? I don't like the fact that a government can go in and rip up contracts they signed. That puts contract law back many years and it is something that Obama seems to like (see his mortgage bailout plan).

    Also, many of the so-called "subsidies" are actually targeted breaks for the most expensive incremental production, like deepwater drilling. Without these subsidies, none of that U.S. oil will get pumped out of the ground. So, eliminate these subsidies and you will eliminate some of our domestic production.

    Still waiting on my NGV and the infrastructure to keep it filled. I believe its coming...just darned slowly!
    Apr 27 09:26 AM | Link | Reply
  •  
    Dave Marsh: Thanks for the comments on nuclear power. I agree with your concerns regarding IFR reactors for those outside the nuclear club. I'm not familiar with the CANDU system but will look into it. From your description of it it would seem to be a good solution for non nuclear countries. I have little doubt that advanced nuclear power is required for our future because when you look at the numbers and if you think we must reduce carbon dioxide emissions there is no other source that will supply the required baseload power.

    Your thoughts on disposing of nuclear waste in the Mariana's trench are very interesting to me. Many years ago I was involved in what became the Deep Sea Drilling Project and conceived the idea of drilling the waste into trench subduction zones. There are quite a number of them in the ocean, some not as deep, but with high subduction rates that would rapidly (in geologic time) carry the hot material rapidly into the deeper zones within the earth. It was usually thought to be a crazy idea by others.

    Apr 27 10:20 AM | Link | Reply
  •  
    ripskii
    They thought I was crazy too (I got a B/C on the paper). Oh well. Misguided enviros see it as ocean disposal, which of course it is not; rather it would be mantle disposal, where no man nor beast will ever go. Gravity fed thermal ablation + subduction = deep, deep disposal. I personally think it is overkill. As the French have proved, guarding a relatively minute volume (after 94% volume reduction by reprocessing) of a tangible, ceramic solid is just not that big a deal. And it self-defends by way of gamma emissions which would prevent (i.e. fry) terror-minded thieves...
    Thanks for not calling me nuts.
    Apr 27 10:38 AM | Link | Reply
  •  
    nuclear and fossil fuels are getting subsidized to the extent that they are regulated, no more, how ignorant are you people? let me guess, you include not taxing non-producing stripper wells? ignorant.

    consumption is worse for the environment than pollution and you are in favor of increasing consumption, subsiding new technologies, most of which will in fact fail or be obsolete before commercially viable. subsidizing new industries destroys jobs IN THE LONG RUN because they have a layer of government administration (simple math, just subtract ).

    Fitz/TBoone's scheme will, most certainly, result in the price of natural gas prices skyrocketing, that is why TBoone invests in nat gas--again, how freakin ignorant are you idealists?

    passing new laws which destroy efficiency and freedom, and hurt the environment by increasing consumption, is jacked-booted fascism at its worst.
    Apr 27 11:17 AM | Link | Reply
  •  
    What subsidies for oil and coal? Companies are paying royalties to extract oil and coal. Yes, many companies are getting significant credits on these royalties, but in any case, companies are paying government(s), not the other way around.


    On Apr 24 08:00 PM Michael Fitzsimmons wrote:

    > ripskii: ok, now you have intrigued me. i am going to start doing
    > some nuclear energy research after my next nat gas article. thanks
    > for the link.
    >
    > alex filonov: ok, let's let the market decide: take away the subsidies
    > for coal and oil and let the chips fall where they may! you seem
    > to forget the heavy subsidies that coal and oil are getting now,
    > and have been getting, since the 1970's. add in the oil wars and
    > the cost to secure oil shipments to the US and then where does nat
    > gas stand? answer: a superior US produced fuel. here's the real history:
    > congress, at the advice of exxon at the time, actually prohibited
    > natural gas from new industrial and electrical generation in the
    > late 1970's (!). that is what led to the huge buildout in coal burning
    > electrical generation in the US (which we are now paying a huge environmental
    > cost for). natural gas has taken a backseat to oil and coal ever
    > since in the eyes of the government and governmental policy. i mean,
    > have you actually read EPA regulations wrt NGVs? what a joke. you
    > should consider reading robert hefner's book, The Grand Energy Transition,
    > so you can get the full story. also, i have never offended canada
    > or mexico. i have said that mexico will likely cease to be a significant
    > oil exporter within the next 5 years, and i have stated that i think
    > it is ridiculous to use huge caterpillars to dig oil sands out of
    > the ground, boil it using natural gas and lots of fresh water, only
    > to obtain a low grade crude that needs further refining in order
    > to achieve gasoline when we have natural gas ready to use as is!
    > that is not the market deciding, that is government policy keeping
    > us addicted to oil at any and every cost. it's absurd in my opinion.
    Apr 27 03:12 PM | Link | Reply
  •  
    If you think that reliance on cars is corrupting, sell yours. I lived for 40 years in the country where mass transit was the only reasonable option and it wasn't a happy living.

    On Apr 27 01:32 AM seedontbelieve wrote:

    > You never heard of mass transit?
    >
    > solves the balance of trade problem
    >
    > solves private affordability issues
    >
    > solves pollution issues
    >
    > cuts health services costs
    >
    > cuts police man-hours needed
    >
    > saves sittingn-in-gridlock man-hours
    >
    > supplants corrupt overreliance on cars, multi-dollars per
    > passenger mile, tax-funded roads, traffic control with
    > per passenger-mile far more efficient transportation,
    > thus beginning to just catch up with other nations
    Apr 27 03:16 PM | Link | Reply
  •  
    Dave Marsh: You are exactly correct about mantle disposal of the waste and your concept strikes me as brilliant. Crazy ideas were normal at our institution and in fact the idea of drilling a core in deep water was considered crazy at that time. We just went ahead and did it to the surprise of many (but not all since it was funded after all). Considering all the work already accomplished on the IFR reactor, pushing ahead with its development and building them in quantity is anything but crazy. In fact it would be crazy NOT to move forward with this program because it solves so many problems confronting us.
    Apr 27 07:04 PM | Link | Reply
  •  
    January thaw

    What are the problems with technology and costs of wind energy? The technology works and produces inexpensive electricity. It's the greenest energy of all. Spain has 12% wind power already, but in America where we have 1% or whatever, we're told that it can't work. Denmark has 20% wind power. We have a huge country with tremendous wind and solar potential.


    realold

    If you read the article at climate progress referenced in my first comment, you would see that what you believe about the economics and environmental impacts of running cars on electricity are not well founded. The article makes a good argument that running cars on NG has it's drawbacks too. It's more efficient to use the NG to make electricity to run cars, than to burn it in cars. About twice as efficient, which means half the emissions for the same miles driven, and half the NG used. But that doesn't necesarily mean we shouldn't build NG cars, if it will help us get off foreign oil and help transition us to the future of transportation. Even T Boone Pickens sees it as a transition facilitating choice, not a permanent solution.

    There's not a perfect solution during this difficult time for personal transportation. But we do have the tools to transform the electric grid and improve efficiency.

    Maybe we should pursue both NG and EVs, NG-PHEVs and HEVs, with the EVs being fine for city cars, delivery vehicles, taxis, commuting, job trucks on farms and industrial sites where long range is not a big issue, etc.
    Maybe eventually we will have Plug in hybrid biofuel cars, using biofuels that work and make sense economically and environmentally and with inexpensive high performance batteries.


    " I have read that as much as 2/3 of the electricity sent through power lines to your home is lost to the atmosphere and heat"

    I think 2/3 is a little high. but
    That's why we need HVDC transmission lines with their much lower line loss. There are other ways to cut our waste energy and make our power plants more efficient, like combined heat and power.
    You are talking about running electric cars on todays grid, which by the way is already cleaner, in general,than burning gasoline in all the cars. Other's are talking about a grid with increasing inputs from wind and solar, which will develop along with the transition to EVs and PHEVs. We aren't going to replace our entire national fleet of cars next year to EV or NG, or even in ten years. By then, at least a few hundred gigawatts of solar and wind will be built.


    The NREL says California has 661 GW of solar thermal (CSP) potential in it's deserts. That's their low estimate, based on the flattest land that isn't in environmentally sensitive areas. Less flat land can also be used. Compare 661 GW with California's present total generating capacity of 58 GW. There are 5 other southwest states with similar or larger potential for solar thermal.
    Add to that photovoltaics as distributed rooftop etc., and utility solar PV and solar starts looking like real power. Like as much as over 300 average size nuclear plants in California alone.

    This is our best renewable energy source and the one most Americans have probably never heard of.
    Which is why I talk about it. Go to the Desertrec website to see what others see for CSP potential in Europe, North Africa and the Mid East and the rest of the world.

    www.desertec.org/

    www.trec-uk.org.uk/

    www.trec-uk.org.uk/csp...
    "CSP Around The World"
    Worldwide CSP solar potential.

    Some study found that wind power could provide enough electricity to power every car in America, using a square of land 1.2 miles on a side, if you don't count the space between turbines, which is large. Wind only uses about 2 1/2% of the land where it's sited, allowing agriculture or nature to co-exist with it.
    A 2 MW turbine takes up about as much ground space as a parking space for a car.

    Wind and solar will create more jobs than any other energy development. The NREL says that solar thermal plants would be a far greater economic benefit to California than new gas plants.



    Apr 29 03:04 AM | Link | Reply
  •  
    let us focus on a distributed generation of hydrogen. via geothermals, wind, wave etc. And a transportation network where longhauls use hydrogen.
    May 19 09:44 AM | Link | Reply
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