Old Wizard

How Much Natural Gas Remains in the USA?

Freya, I wouldn't want to disappoint you. This article sounds like still another sky is falling. I have ben followin the price of UNG for a while, since I considered it for an investment. Recent history shows a glut of natural gas with storage capacity almost exhausted. There was even a Seeking Alpha article that cautioned people to not invest. Since then at least one new source has been discovered off Norway. I can't vouch for specific numbers, but believe that the 100 year number is more likely.

Making Natural Gas Transportation a Reality

Fitz, As you have been predicting, the price of oil is going up. This combined with a new impetus on ethenol by the Gov and the printing of money by the treasury will lead to a commodity and food price upward spiral like we experienced early last year. For a highly leveraged economy this spells bad news. The deleveraging the country has experienced to date is only half way to where it has to go and a price upward spiral on basic commodities at this point is double trouble. We are on the verge of being at the same place as this time last year and lost a valuable year without the definition of coherent and urgently needed and articulated process for correction. In the interest of satisfying his single issue constituencies the president has not applied the necessary time constraints and consequently, not focused his programs[funding] and his political speak on the first bullet aimed at the country's economic head.

Making Natural Gas Transportation a Reality

Fitz and pragmatist. I think the three of us agree on the path forward, but the announcement this morning that GE, a company in which I labored for a long time and hold too much stock, just announced plans to build a new battery manufacturing plant in the US is another disturbing sign. The CEO is one of Presidents economic advisors. This coming from a company which is still cash strapped and wants to sell its appliance business. Given that many US battery makers are struggling and the existing imposing foreign competition, this announcement portends a greater Gov push on electric vehicles, does it not? On the plus sign, AT&T has gone public with ads, featuring their natural gas-driven truck program that highlights the positive effects on the environment.

Making Natural Gas Transportation a Reality

Maybe the Obama administration has gone for the bifuel compromise, but there seems to be some counter evidence in recent events and announcements. 1] Ford, which might be the only US viable American automobile company left standing, just announced a massive investment to convert a truck plant to ev automobile production by 2011. Would Ford make a commitment like this if they thought that CNG was in the Administration's plans? 2] None of the stimulus money is directed toward supporting technology or implementation of natural gas conversion. 3] None of the discussions surrounding GM's future are centering on a thrust to natural gas driven vehicles which GM already can produce. If the administration has any intention of implementing a bi-fuel solution, where is the tangible evidence? It is not surprising that Senator Obama would support the natural gas thrust and President Obama has yielded to the purist environmental constituency. As all the pundits continuosly remind us, 'that's politics". Too bad we can't have real problem solving for a change. The announcement that one can now rent a mini cooper pure ev for $862/ month and 462 people have already signed up, just reported by local radio, is another testimony that articulation by a charismatic figure will induce some people to act regardless of the wisdom or economic implications of the act. That is why the national leadership should be more thorough in its analysis and articulate more well thought out solutions to the country's problems.

Making Natural Gas Transportation a Reality

Fitz, I want to congratulate you on not only your article, but on your responses to some of the negative comments. It is obvious that some of the commentators don't understand our fundamental economic structural problem and, therefore, don't buy into the need to replace the oil we import from questionable sources with a commodity we provide ourselves. They do not buy into the 5 to 7 year time constraint; so let me take a crack at it. Let's assume there are app. 130 m passenger cars in the US and 2m trucks, buses and other vehicles. For purposes of this exercise, let's assume that passenger cars are replaced after 10 years of life and that the replacement rate is linear[13m/yr]. For simplicity and environmental purism, let's assume that the industry produces all electric vehicles that are affordable and attractive to support the replacement rate assumed by the beginning of 2012. By this computation half the passenger cars would be all electric by seven years from now. Trucks, buses and other vehicles would be assumed to be not electric.In seven years at the current rate of expansion of wind and solar as predicted by the president, the amount of electricity provided by these sources would be about 8% of current generation capacity and would not provide the capacity to recharge the 65 million passenger cars. Now since the electric cars that are provided out of the gate won't appeal to many, the linear replacement rate is optomistic. The state of affairs at the end of 2016, under these assumptions would be that over half the vehicles on the road would still use gasoline, existing coal and oil-fired electrical generation plants would still exist and the operating cash flow of the country would still be in the range of .5 to 1 trillion negative. Over the seven years to get to this point, the country, will ship almost 2 trillion dollars abroad, buying imported oil. The above assumes an average price of oil of $80/ barrel over the seven years. Since the car companies are assuming sales of 10m cars/year or less rising slowly to perhaps 13 million/yr in the US in 4 years, the linear replacement rate is vert optomistic. The bottom line is that the pure electric car solution is not very feasible as a 5 to 7 year solution to our strategic or economic problems and our economic and strategic energy dependence problems can't wait til 2020 or 2030 for a solution. Any reasoned analysis that is much more substantive than the above will most likely yield an even more long term horizon for the purest solution and spells great difficulties for the future of our country.

Is There Enough Natural Gas?

Fitz, You probably could write a more meaningful bill in 10 pages. It would probably actually be read by at least one Congressman as opposed to the one in the works that won't be read by any one who votes on it. I also believe, I could write a simpler, fairer tax code that would increase tax revenue in 100 pages or less. It would replace the existing tax code that now encompasses over 70 thousand pages. Herein lies the problem the country has. How can any urgent problem be understood, proper solutions defined and implemented with such convoluted and ponderous laws that even the people who vote to pass them don't read or understand.

Is There Enough Natural Gas?

Artful dodger, While I agree that fitz sometimes strays from his primary message, I don't think that you have understood the fundamental issue. The country's current account has been increasingly negative since 1991. This is a measure of the country's operating cash flow. The money borrowed to balance our domestic budget adds to this negative cash flow problem. The conversion to natural gas transportation replaces a commodity we largely import[oil] with one we have[natural gas] as fitz has adequately disclosed in his articles. Morever, the conversion of a large part of our buses, trucks and cars and their ultimate replacements could be accomplished in 5 to 10 years. Instead of forcing the country to go to electric cars that require much development, new battery technology and a new distribution structure, the administration could and, fitz and many of us believe should, focus on this alternative, first, as the most feasible solution to significantly reduce oil imports in 5 years. A by- product of this alternative is the quick creation of domestic jobs, less dependence on potential enemies for our energy and reduced carbon dioxide emissions and atmospheric pollutants. These are all good outcomes. Nuclear, wind, solar and other power generation sources should also be pursued, but have longer term solution horizons and present more infra-structure and/or distribution problems than the natural gas alternative. The economic structural problem caused by the country's negative cash flow, at least in my view, can't wait 20 years to address. Maybe Fitz might address a broader spectrum of problems with his articles, but he prioritizes the energy dependency and economic problem above the others and I applaud his effort.

Is There Enough Natural Gas?

Pragmatist. I heard about the bi-partisan bill being proposed, but my thought is that it doesn't have the support of the president nor his energy secretary and therefore I am skeptical it will get out of committee. Fitz, I know you have articulated your priority for problem solution in your previous articles. My comment was in the vein of reinforcing those priorities. Futher, in the interests of getting a near term solution which addresses the country's most pressing problems, we need not try to solve all problems at the same time. Natural gas transportation is a significant step that provides a step increase in our most pressing problems. Creating a reactive counter argument as we see in the above coal comments by suggesting that we replace those is counter consensus building. While that would be beneficial, it would probably take much longer than 5 years and would bring a strong and devasting counter attack.

Is There Enough Natural Gas?

Fitz and pragmatist, I think we are now converging to a meeting of the minds. the fundamental economic problem facing the USA is an increasing negative cash flow with the rest of the world. Arguing about the scientific merits of man induced global warming is a distraction, especially when the media and celebrities hype it so much as to have a majority of elementary school kids believing they won't reach forty because of the upcoming calamity. Facts like average temperature reduction over the last 4 years, don't matter. As a believer in the two bullet theory, the discussion becomes a distraction to solving our very important and most serious problem, as I've indicated before. Why not go to natural gas driven transportation immediately with urgency and have it focused by the Gov with its stimulus package. A solution that solves our pressing geopolitical, economic and jobs problem and decreases green house gases and air pollution at the same time. There must be something wrong with it[ I'm being cynical], because the great intellects of unspecified I Q that have been and are running our country would have implemented it, already. Our energy policy remains muddled and driven by the second bullet or even the third, when the first bullet aimed at our head has already reached muzzle velocity.

Is There Enough Natural Gas?

Fitz, the masking of a non-existant energy policy with some decent wind and solar initiatives is right on except those initiatives are not decent. Establishing a goal of doubling the electrical generation due to wind and solar in 3 years as the president has stated reveals a total lack of insight into the urgency of the issue. As I said before, the latest estimate I have seen is that wind and solar accounts for.9% of electrical generation; doubling it to 1.8% doesn't really make much of an impact and is more rhetoric to appease a single-issue constituency than a substitive initiative. If the administration was really interested in making wind and solar a timely solution they should have devoted a least 200b of the the stimulus to creating significant facilities in 5 years and put into place the gov. contracting agency similar to Nasa to deal with the enabling of multiple implementation projects that would meet stretch goals in 5&10 years. Repeating myself, an R&D guy to head up a dep't that needs a systems mentality, which quickly identifies the fundamental problem and the potential solution alternatives, applies time and feasibility constraints, does appropriate analysis and then makes consistent funding decisions that will implement solution under the constraints, is destined to be a disaster. It's just another indication that the academic theorists are preferred by this president than proven systems personnel that have the ability, technical breadth and experience in solving multi dimensional problems. The general approach of the R&D community is a slow, methodical investigative approach with long term time horizons at the end of which success is demonstation that the technology works at which time generally others do the implementation. Usually such folks are invested in the technology they have studied and don't really investigate alternatives. By CHU.s agnostic statement, we can only believe that he[and the president] are biased to their solution and have a R&D solution approach while their approach to other issues is slam bang, sky is falling urgency. Lack of understanding as to the seriousness of our energy dependency and negative cash flow problem is scary.

Is There Enough Natural Gas?

Fitz, My comment about Chu being pro science was in response to another commentator who critized your plan and justified what is happening by employing the pro science argument of the administration by citing Chu's presence as evidence. Actually John Peterson's last article brought some particularly interesting commentary, concerning rare earth materials in electric motors and I amd others have commented on the paucity of lithium in the USA to support the battery's required to refleet and supply the USA and presumably other polluters with electric cars. Another comment on the comments: it always amazes me to hear that building out a natural gas supply delivery system is more difficult than going all electric with renewable energy. Again if there is no urgency, time to get there is not a factor. How anyone in the US can believe that the administration has an energy independence plan that achieves any meaningful goals in 5 years or possibly even 10 years when the alternatives available have not been scientifically analyzed, their employment time vs impact to stated measures of performance evaluated and their related costs through implementation compared. This is the stuff of objective problem solving and I don't believe Washington has the competence to do it. Being an agnostic relative to natural gas-powered transportation is tangible evidence.

Is There Enough Natural Gas?

Fitz, I applaud your attempt to quantify the supply vs usage of natural gas. I haven't done a check of your numbers, as you suggest with my first read, but some questions did arise at first glance. First the 25m/gal average assumption seems too high if you take, trucks and buses into account. Second, there are oil fired electrical generation facilities in use and they didn't make your table. Third, I missed the yearly amount of natural gas that is used for home heating in the US in your article, did you account for that usage. Other than that, I think we should make the case for natural gas driven vehicles the primary focus for a whole host of reasons of which the following are paramount: we have enough natural gas to power our transportation system for many decades,natural gas is our commodity and could replace the oil we currently import from our potential enemies and reduce our operating cash flow with the world by approximately 33% and it would reduce air pollutants and greenhouse gases considerably. As the comments above indicate taking on the coal-fired existing facilities brings on another set of opposition arguments that we don't need to address now. The reason being that the energy policy the administration is pursuing is essentially aimed at replacing gas driven transportation with electric/ battery powered vehicles. The increase in wind and solar being pursued won't dent the current coal fired capacity in ten years and if battery powered vehicles increase as they hope, it will be hardpressed to match the increased electrical demand. The last figures I saw for electrical power generated from wind and solar was less than 1%. How many years would it take to get to even 20%? The president's stated goal is to double this figure in 3 years. At that rate, it will take almost 20 years and that assumes an exponential growth. Maybe this administration is pro science but I for one don't understand their logic and have yet to see their energy plan quantified in anything close to what you have done in this article.I think if they had done so,they would not be agnostic about natural gas fueled transportation.

A Natural Gas Centric Strategic Long-Term Comprehensive Energy Policy

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.

A Natural Gas Centric Strategic Long-Term Comprehensive Energy Policy

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.

A Natural Gas Centric Strategic Long-Term Comprehensive Energy Policy

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