The upheaval in the Mideast has brought gasoline prices front and center once again. Traders are building a risk factor into forward purchase contracts and gasoline prices per gallon now hover around $4 a gallon with no end in sight.
Recent events have conspired to seriously complicate the search for safe alternative energy sources. The horrific earthquake in Japan and the catastrophic tsunami that followed 30 minutes later, caused untold death and destruction and the partial meltdown of some of Japan’s nuclear reactors, and triggered a release of radioactive material into the atmosphere with health ramifications that are, as of now, uncertain to say the least.
When the full extent of the damage at the reactors is finally known, the news will not be good. Not only will Japan, which relies on nuclear reactors for a substantial portion of its energy needs have to find an alternative source of energy, but the U.S., which has not built a new reactor since the Three Mile Island incident in 1978, will surely have to reassess whether additional nuclear reactors can be built, given the understandable fear that has been engendered by events in Japan. Anti‑nuclear advocates now can point to new dangers and, in fact, an enormous reassessment of prevailing safety assumptions will have to be immediately undertaken. The need for caution and further study will delay any new nuclear reactors now on the drawing boards.
Environmentalists have thrown roadblocks in front of any efforts to recover oil from known sources within our control (e.g., Alaska or offshore.) Instead they advocate pouring money into so‑called green energy — wind farms and solar panels. While these alternatives may play a meaningful role as future sources of energy, they will not, for the foreseeable future, replace the fossil fuel needed to supply our current needs and provide for economic growth.
For solar or wind energy to be a meaningful alternative source of energy, storage technology would have to be vastly improved. Wind power like solar power is available only intermittently thus requiring that the output produced be either stored or immediately transported over transmission lines. Neither solar nor wind power can sufficiently provide the electricity needs of this nation without staggering investments in storage and transmission. The NIMBY (not in my backyard) factor teaches us that environmentalists and others will fight tooth and nail about above or below ground lines. Thus, even if wind and solar become viable as major sources of the U.S. energy supply, it will be decades before these sources play a meaningful role in the national energy picture.
In the meantime, the U.S. must have sufficient energy to supply the existing needs of our people and further provide for economic growth. So why don’t we tap our available sources of oil and natural gas? Largely, the answer lies in the roadblocks created by the so‑called “green” movement, which has successfully learned how to prevent any further drilling. After President Obama lifted his short‑term offshore drilling ban, not one permit to drill has been issued. The “greens” have gamed the system to make it virtually impossible to get the necessary government permission to drill. At both the federal and state levels countless hoops need to be jumped through and endless reports filed; environmental impact studies that are required over and over again, resulting in huge upfront expense to the applicant. Thus, we increasingly rely on foreign sources of energy typically from unstable or hostile nations. The multi‑billions of dollars which flow to these countries constitute a tax paid by U.S. consumers, draining the purchasing power of individuals and corporations and lowering the rate of growth we need to pull ourselves out of our current economic doldrums.
Since wind and solar energy are still years off, assuming they are ever viable replacement sources, and environmentalists thwart drilling for more U.S. oil what is the alternative? In the last couple of years energy suppliers have turned their focus to natural gas, which has long been considered a cleaner fuel with far less harmful emissions. Natural gas is already used to heat a large percentage of U.S. homes and is a major source of energy in many major industries, such as pulp and paper, chemical, metal and petroleum refining. Increasingly fleets of vehicles, such as buses and commercial transporters run on natural gas. However, according to a report prepared for the U.S. Department of Energy, Office of Fossil Energy, in April 2009 titled “Modern Gas Development in the United States,” natural gas is being consumed at a rate that exceeds domestic production and the gap is increasing. It is estimated that the gap between demand and domestic supply will grow to 9 tcf by 2025 (a tcf is a trillion cubic feet or one billion mcf [a billion thousand cubic feet]. A tcf is enough natural gas to heat 15 million homes for one year, generate 100 billion kilowatt hours of electricity and fuel 12 million hybrid gas fired vehicles for one year.
The good news is that according to British Petroleum “BP” “the United States is sitting on over 100 years of gas supply at current rates of consumption — which provides [it] with a unique opportunity to address concerns about energy security and climate change.” (The Washington Post December 3, 2009) The same Washington Post article reports:
“Recoverable U.S. gas reserves could now be bigger than the immense gas reserves of Russia, some experts say. The Marcellus shale formation, stretching across swaths of Pennsylvania, New York and West Virginia, has enough gas to meet the entire nation’s needs for at least 14 years, according to an estimate by two Pennsylvania State University experts.”
Former Colorado Senator Tim Wirth states that at a minimum: “natural gas can serve as a bridge fuel to a low-carbon, sustainable energy future.”
So what’s the catch? It has long been known that this gas is trapped in shale rock. Only recently has the technology advanced sufficiently to extract that gas through a process known as fracking (horizontal drilling and fracturing rock with high pressure blasts of water, sand and chemicals). Newsweek’s online education site recently reported that green alternatives will not fill the fossil fuel void. Just as new technology, over the years, demonstrated far more coal and oil reserves than previously thought, innovations in extraction techniques, according to the International Energy Agency, make worldwide gas reserves from shale rock sufficient to supply the world for 250 years. The Marcellus formation alone (located in the Appalachian Basin), according to the publication Energy and Capital may contain up to 1300 tcf of natural gas.
Bloomberg Business Week reported in its December 16, 2010, edition:
“The Potential Gas Committee, an incorporated, nonprofit organization that consists of knowledgeable and highly experienced volunteer members who work in the natural gas exploration, production and transportation industries issued its biennial assessment of the nation’s gas resources in June 2009. This study indicates that the United States possesses a resource base of 1,836 tcf of natural gas. When combining these results with the Department of Energy’s latest determination of proved gas reserves, 238 tcf as of year-end 2007, the United States has a future supply of natural gas of over 2,000 tcf. At current consumption rates, this is enough natural gas to supply the nation for the next hundred years. This is an increase of more than 35% when compared to the Committee’s 2006 assessment. This increase is largely attributable to increased supplies from unconventional gas plays, specifically from shale gas development.”
As you might expect, environmentalists quickly targeted fracking as dangerous and have raised enough concerns to prompt a fracturing moratorium in New York. The fear was that dangerous chemicals would seep into the water table. However, as Harvey Wickstrom, Chief of the Ohio Geological Survey pointed out: “There is no way the fracking process is going to affect ground water . . . the sheer depth of the wells and the weight of the rock and earth above would prevent it.”
Holman Jenkins in a recent column in The Wall Street Journal stated:
“Before we wallow in self‑congratulation, let’s note the impossibility of equivalent transformations in other areas of American life. Our air traffic control system is controlled by government and has failed miserably to keep up with traffic growth. Our public schools are laboratories of stasis. To touch on an especially sore point federal and state regulation of health insurance has all but extinguished innovation . . . even as government policy has made us more and more reliant on these third party payers.
The shale gas revolution has been a surprise, . . . nobody planned it. There’s a lesson here for every kind of reformer: Often the only [reform] needed is a plan to remove obstacles to innovation.”
We are already at a crossroads here. Just when gas prices have spiked and nuclear concerns have been raised, a new and bountiful energy source has become commercially feasible. You might think the greens, who claim they want to save the earth and its atmosphere, would be beside themselves with joy. But of course they are not. Much of the green movement isn’t an environmental movement at all; it is a political movement. It exists to support the aspirations of the left, which are to constrain U.S. economic growth and world leadership, so as to create the statist, socialist nation they foresee.
Don’t believe it? Listen to Patrick Moore a co‑founder of the environmental organization Greenpeace. Moore authored a book, Confessions of a Greenpeace Dropout: The Making of a Sensible Environmentalist, in which he sheds light on the green movement and explains why he left Greenpeace. He exposes its extremist positions and states that it has been “hijacked by political and social causes as well as the left.” Moore, writing early this year in the Vancouver Sun, goes on to say, “the collapse of world communism and the fall of the Berlin Wall . . . added to the trend toward extremism. The Cold War was over and the peace movement was largely disbanded. The peace movement had been mainly Western-based and anti-American in its leanings. Many of its members moved into the environmental movement, bringing with them their neo-Marxist, far-left agendas. To a considerable extent, the environmental movement was hijacked by political and social activists who learned to use green language to cloak agendas that had more to do with anti-capitalism and anti-globalization than with science or ecology.”
Prominent scientists in the U.K support Mr. Moore’s view. Lord May, a former chief government advisor and president of the Royal Society singled out Greenpeace as an environmental campaign group that had “transmogrified” into one with primarily an anti‑globalization stance.
Even if recoverable shale gas turns out to be a smaller fraction than geologists believe it to be, we are still unquestionably blessed with a bounty like we once had in oil reserves. We cannot afford to allow anti‑growth advocates, through endless procedural maneuvers and “the sky is falling” tactics divert us from this incredible and timely opportunity. Our energy security and economic growth depend upon taking advantage of every sound energy opportunity available to us.
By Hal Gershowitz and Stephen Porter
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