Old Wizard

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.

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

America Needs a Natural Gas Transportation Infrastructure

Fitz, The increased rhetoric concerning energy independence can be a step in the right direction, yes, if it is followed by an implementation program that drives the country that way in 8 years or less. As I commented on John's article, the stimulus plan after interest represents over 7% of the country's annual gross national product. This is perhaps the largest investment the country has made in its history on its domestic economy in one year. Given its debt status, it may not be possible again without great dislocation. To not implement a significant set of pilot projects and set forth a comprehensive plan with trackable and near term milestones does not display a sytems grasp of the problem and its solution. Not including natural gas in the plan is a sympthom of the inability of our Gov.to respond in the problem solving mode required. As in the past it appears to be a reaction to diverse single issues that the pressure groups of the constituencies that elected the party in power have articulated. We should not be satisfied with the buckshot approach embodied in the stimulus plan even if the component R&D is diserable, because it will take too long to solve our country's urgent economic and strategic energy problems. As I said before, I think several of us should get together and lay out the complete plan and then drive to publicize it. The plan would include near and long term milestones, large scale pilot projects,funding requirements as a function of time, R&D in enabling technology, new contracting agency characteristics for letting and monitoring the pilot projects and candidate geographical selections for implementation of those projects where required. The plan should require that the US use 5 million barrels of oil/day less than today in 5 years and 10 million barrels/day less in 10 years.

America Needs a Natural Gas Transportation Infrastructure

Fitz, Didn't realize it, but I'd already read John Peterson's article when I commented on yours. In fact, I commented on it and had a good interchange with John. His articles, I find, are informative and a true attempt at quantitative analysis. There are some beneficial initiatives in the bill as he points out. He agrees, however, that there is no comprehensive plan and that significant pilot programs with time specific goals would be preferable. i won't repeat my points here, but you can read them in the comments to his Feb 16 article which you referenced.

America Needs a Natural Gas Transportation Infrastructure

Fitz, I will read the article you suggest. I don't believe your big oil conjecture in explaining the resistance to the use of natural gas. I believe the resistance to T boone is political and partisan. I also believe that strong opposition is coming from the global warming zealots and the environmentalists who see all fossil fuel as the enemy. Their position is emblematic of the one variable solution problem. I also don't agree with the comments that evaluate all potential solutions with what is cost effective today. Some vision is needed and geopolitical dependency and future economic survival need also to be part of the evaluation. Had we had that vision 30,20 or 10 years ago, how different would our foreign policy and the country's operational cash flow be today. The bill just passed seems not to have any sense of urgency, stresses developments that may make our dependency on foreign oil less in 10 years, but states no concrete goals on any trackable time table

America Needs a Natural Gas Transportation Infrastructure

Fitz, I thought you had resigned yourself to be a voice crying in the wilderness. I'm glad you're still there. I was afraid as I indicated in my comments to your previous articles that the Obama plan would spend more time catering to the various single variable constituencies that constituted his base than devising and promulgating a comprehensive energy program. Instead of solving the systems problem that energy independence, lasting job creation, reduction of the negative current account balance and at the same time reducing fossil fuel deleterious emissions represents, he chose to throw money at the fan and hope the problem solves. I believe the stimulus program is a missed opportunity that may not again present itself to ensure a prosperous future for America without a great amount of dislocation,suffering and the danger of war.