How a Rational US President Would Create Jobs Now

A rational US president who was genuinely concerned about revitalising the American economy, would first remove all unnecessary and nonsensical government impediments to business investment and enterprise. Commerce and industry are particularly susceptible to government restrictions on the energy, power, and fuels that run society's crucial machinery. That would be a good place to start.

Video h/t Washington Examiner

Imagine if all of Obama's devastating policies of energy starvation were revoked. The resulting growth of jobs, revenues, and energy production would be astounding. Growth of jobs directly involved in energy production, transport, and sales, would be just the beginning. Each new energy job would stimulate the creation of supporting jobs in services, housing, manufacturing, infrastructure, etc. And so it goes: growth breeds growth.

The images below are taken from a report released last week by Wood MacKenzie, looking at the impact of relaxing just a few of President Obama's anti-energy policies (h/t Powerlineblog).

Job Creation Under Relaxation of Obama RulesWood Mackenzie’s analysis found that U.S. policies which encourage the development of new and existing resources could, by 2030, increase domestic oil and natural gas production by over 10 million boed, support an additional 1.4 million jobs, and raise over $800 billion of cumulative additional government revenue.
_quoted_in_Powerlineblog

Enhancement of Government Revenues Under Relaxation of Obama Anti-Energy RulesThe report assumes that the following changes would be made to existing Obama policies in order to allow energy and economic recovery to occur:

• Opening of Federal areas that are currently “off limits” to exploration and development
• Commencement of leasing, drilling and development activity in currently closed regions. Regions to be opened include: Eastern Gulf of Mexico, portions of the Rocky Mountains, Atlantic OCS, Pacific OCS, Alaska National Wildlife Refuge (ANWR) – 1002 Area, National Petroleum Reserve, Alaska (NPRA) and Alaska offshore

• Lifting of drilling moratorium in New York State
• Commencement of drilling and development of Marcellus shale in New York State

• Increased rate of permitting in the offshore Gulf of Mexico
• Allows for a return to pre-Moratorium exploration and development activity

• Approval of the Keystone XL and other future Canada to U.S. oil pipelines
• Facilitates additional Canadian oil sands development, thereby increasing the demand for U.S. supplied equipment and infrastructure

• Regulation of shale resources remains predominately at the State level
• Environmental regulation of shale gas and tight oil plays are not duplicative or unduly burdensome. Permitting levels are at sufficient rates to develop resources in a timely manner _quoted_in_Powerlineblog

Increased Energy Production Due to Relaxation of Just a Few of Obama's Energy Starvation Rules
The improvements projected in the Wood MacKenzie report (PDF) are based largely on the revocation of Obama's de facto offshore oil moratorium, the approval of pipelines from Canada through the US for oil sands transport, and a cleaner and more streamlined set of regulations overseeing shale oil & gas production. The report also assumed an opening of currently blocked oil & gas resources in the Arctic and in the US mountain states, for development, and a reduction of duplication of bureaucratic environmental regulations.

In reality, according to Al Fin energy analysts, a more rational pro-energy policy would improve North American jobs, government revenues, and energy production far more quickly and to higher levels than the Wood Mackenzie report suggests. The reason our analysts are so confident is that potential for development of massive coal and kerogen deposits were not closely considered in the projections. Nor was the potential for development of advanced nuclear energy technologies for both uranium and thorium cycle reactors carefully considered.

Abundant energy opens the doors to other industries and commerce, which means more jobs and more revenues even in areas far removed from direct energy production or sales. The converse is true: energy starvation reduces jobs and revenues not only in the energy-related industries, but in society as a whole. And that is where the US stands under President Obama's policies.

Energy starvation -- shutting down reliable energy in favour of unreliable forms of energy such as big wind and solar -- is never a smart policy. It is a strongly ideological policy promoted by green faux environmental activists, with the unspoken aim of whittling away at the industry and commerce which support advanced economies. Economies which fall under the curse of energy-starvation policies slowly succumb to worsening economic conditions.

Adapted from an article published on Al Fin Energy

More: Three more places where Obama policies are holding back wealth and energy creation: Julia, Arctic, Bakken

The Obama agenda could not be more destructive of US jobs and the US economy if it were designed specifically to wreck the private sector.

A Pandemic of Malthusian Illiteracy?

Global economy optimists however say that "Malthusian illiteracy" lurks behind remaining adherents of Peak Oil theory - which basically says conventional oil production will stagnate and fall but demand will go on growing. _MarketOracle

As knowledgeable analysts come to understand that oil demand, rather than oil supply, is currently in the driver's seat, some of the impetus behind the peak oil panic has subsided. And yet the "Malthusian Impulse" continues to drive many observers, against their more rational proclivities. Still, global hydrocarban reserves continue to grow, year after year, and oil demand is slated to decrease in time.

New sources for transport fuels are likely to come from many directions, including new gas-to-liquids (GTL) technologies. Oxford Catalyst's microchannel GTL technology is very much in demand, as are other new varieties of GTL technologies. The market for GTL fuels may be more than 20 million barrels per day! Imagine the impact of that huge new supply on the global oil market. (Note that approximately between 5 and 10 million barrels per day could be produced via GTL from currently flared gas alone. Stranded gas could double that number.) More information at this PDF white paper download from Velocys, creator of the Oxford Catalysts microchannel technology.

A more conventional source for GTL transport fuels is the large scale technology championed by Shell.

In 2011, Shell began shipments from its Pearl GTL project in Qatar...The project is able to produce 140,000 b/d of fuel and 120,000 b/d of ethane and condensates... _Petroleum Economist

And that is just the beginning. As long as the huge price spread between the cost of natural gas and the cost of crude oil remains, more and more GTL projects will kick in to take advantage of this "easy money."

Second and third generation biofuels from biomass technologies are beginning to come on line, slowly (consult Al Fin Energy blog for updated news on this topic). Advanced biofuels technologies are not likely to take an appreciable bite out of crude oil demand for another 5 or 10 years. As long as natural gas prices stay this low, only the most efficient biofuels projects will be able to compete in the liquid fuels markets without government subsidies. But by the year 2030 if the technology continues to develop, the writing will be on the wall. This is a biological world, after all.

Advanced nuclear power technologies are likely to aid the development of new fuels technologies of all kinds, supplying safe and abundant power and heat for a multitude of energy development projects from oil sands to oil shales to biomass and aquaculture projects in cold climates, irrigation and desalination of saltwater in arid climates etc etc.

Other factors leading to a decreased demand for crude oil includes the increasing use of both natural gas and biomass as feedstock for the vast chemicals industry -- an industrial sector previously dependent upon petroleum for feedstock. (see Al Fin Energy blog for much more)

The ongoing global economic downturn and demand destruction extends from Europe to Japan to the US, and is beginning to put stress on the Chinese and Indian economies -- despite all the rah! rah! hype about the coming age of the Chindian global economy. Many nations which have maintained hefty consumer subsidies for transport fuels are being forced to reduce the subisidies. More downward pressure on demand.

Malthusian theories are appealing for their simplicity. And yet the never-ending and never-fulfilled Malthusian predictions of doom ignore the most salient and disruptive human technology of all -- the goal-oriented innovativeness of the human mind.

Despite the best efforts of energy-starvationists in the Obama administration, in the EU bureaucracy, in national bureaucracies of EU nations and advanced nations around the globe -- the prospects for abundant energy and fuels in the future are quite good, as long as the clowns in power do not destroy the economies they oversee.

If you have abundant clean energy and fuels, everything else is doable.

Will Oil Cost $500 a Barrel When the Climate Resets?

Climate Reset via WUWT
The graph above illustrates a "climate reset" occurring due to the solar cycle effect. The next abrupt climate reset is due to occur any moment now -- within the next several years. As depicted above, the "global temperature" is due to abruptly drop to average levels not seen in over 100 years, then to slowly return to near current levels near the middle of the current century.

With all the talk of "peak oil" and oil prices shooting up to $500 a barrel or above very soon, it is worth considering how modern societies will face decades of cooling weather when fuel prices are very high.

First of all, what are the valid points of the "peak oil argument?" Christophe de Margerie, the CEO of France's Total oil company, presents one of the most rational definitions of peak oil:

... he was saying that the world is fast approaching the maximum volume of oil it can possibly produce, which he reckons is about 95 million barrels a day; that's just 8 percentage points higher than the 88 million barrels a day the world consumes at the moment. _FP

A very valid point. The planet has only so many oil rigs, so many trained oil workers and engineers, so many points of production that can be brought into play -- at least until the dawn of artificially intelligent robotic oil exploration, discovery, and production.

Another valid point from the peak oil argument comes from Doug Casey, investor and man of the world:

Peak oil is a geological concept. It basically holds that all the low-hanging fruit has been picked. Now, philosophically, it rubs me the wrong way, in that I have total confidence that human ingenuity will find scores of ways to produce new hydrocarbon fuels – and lots of totally new energy sources in addition. Furthermore, the higher oil prices go, the more will be found – and the more it will be economized. So, in a free-market world, oil is a non-problem.

But we don’t currently live in that kind of world. In the meantime – let’s say the next 10-20 years – oil is an issue, for simple geological reasons. And also because, even though consumption has been basically flat in the advanced world for decades, consumption is going to grow radically in “Chindia” and the rest of the developing world. The biggest problem though is likely political, especially because of the increased political risk in the Middle East, where most of the world’s oil reserves are. You’ve got to be bullish on oil. _HoweStreet

Casey is saying two things about peak oil: 1. The sweet, light crude is becoming more rare and more dear. 2. Free market responses which would make it easy to substitute and adjust to changing supplies, are being hampered by political forces. In other words, Political Peak Oil is in play. One other point Casey is making to support his belief that oil prices are likely to shoot up: He believes that China and India will increasingly drive world oil demand for the foreseeable future.

For those reasons, Casey believes that oil could soon shoot up to $200 or $250 a barrel. If Casey's assumption about Chindia demand are correct, his conclusion on oil price could also be correct. But....

Al Fin energy futurologists and economic forecasters do not believe that India and China are ready to drive the global economic steamroller due to the many serious internal and regional problems each nation faces. And given the serious combined problems of debt and demographic decline which the current drivers of the world economy -- The Anglosphere, Japan, and Europe -- are suffering, we are more likely to see another global economic downturn before too long. This is likely to occur well before China and India are ready to steer the machine.

What does all that mean in terms of the cost of staying warm throughout the 2010s and 2020s? It means that unless the advanced nations of the world can dump their "energy starvationist" governments and learn to use the resources which are available, some societies accustomed to reliable power and heat will find it difficult to keep the lights on.

Energy Storage: The State of the Art

The state of the art for energy storage leaves a lot to be desired at virtually every scale. Power grids and individual businesses, institutions, and residences are far too vulnerable to power fluctuations and unpredictable outages.

Images via ESA (ht NBF)
For those who are curious about the state of the art, the Electricity Storage Association provides a useful comparison for different methods for electrical energy storage (via Brian Wang).

One significant omission from the ESA list is "Cryonic Energy Storage," which may prove to be the best of the current crop of contenders for now, until "flow batteries" are perfected.

Large -scale stationary applications of electric energy storage can be divided in three major functional categories:

Power Quality. Stored energy, in these applications, is only applied for seconds or less, as needed, to assure continuity of quality power.

Bridging Power. Stored energy, in these applications, is used for seconds to minutes to assure continuity of service when switching from one source of energy generation to another.

Energy Management. Storage media, in these applications, is used to decouple the timing of generation and consumption of electric energy. A typical application is load leveling, which involves the charging of storage when energy cost is low and utilization as needed. This would also enable consumers to be grid-independent for many hours.

Although some storage technologies can function in all application ranges, most options would not be economical to be applied in all three functional categories.

... _ESA

More graphic comparisons from ESA below:

Read the entire ESA comparison sheet for more information.

Cryonic energy storage has far more potential than compressed air storage, given the phase change energies involved.

Among electrical battery storage methods, flow cell batteries are most scalable and versatile in application. Newer approaches to flow cells using more viscous electrolyte media should allow the technology to be used in vehicular power storage applications.

Adapted from an article at Al Fin Energy

Obama Doubles Down on Stupid as US Economy Stalls

The US economy is facing another extended downturn, as Obama's economic policies fail yet again to lift US employment prospects. Years ago, Obama promised to keep unemployment under 8% -- as it was when he took office. Unfortunately, unemployment seems to be heading back toward double-digit territory, in the long term.

Under President Obama unemployment has remained above 8 percent for every single month, with the exception of January 2009 when he entered the Oval Office, rising as high as 10.1 percent in October 2009. By any measure, this is a terrible track record, and as even The New York Times acknowledged earlier this week, “no American president since Franklin Delano Roosevelt has won a second term in office when the unemployment rate on Election Day topped 7.2 percent.”

The dire jobs figures are just part of an extraordinarily grim picture for the US economy, nearly two and a half years into the Obama presidency. As ABC News reported yesterday, “a cascade of negative economic reports this week is leaving Americans wondering if this is really a recovery from the recession that officially started December 2007 and ended June 2009.” And the housing market, in which 67 percent of Americans have a stake, is in serious trouble, with home prices sinking to their lowest levels since 2002, falling by 4.2 percent in the first quarter of 2011 and for eight straight months in a row.

In addition, the White House is paralysed in the face of the nation’s towering debts, which reached 62 percent of GDP by the end of 2010, the highest percentage since the end of World War Two. The Congressional Budget Office warned last year in its “alternative fiscal scenario” that “with significantly lower revenues and higher outlays”, the federal debt could grow to a staggering 87 percent of GDP by 2020, rising to 109 percent by 2025 and 185 percent in 2035.
It is little wonder that 66 percent of Americans now worry the federal government will finally run out of their money, and Moody’s Investors Service is threatening to downgrade America’s sterling credit rating unless it gets to grips with the debt crisis. Undoubtedly, the very future of the United States’ position as the word’s only superpower is at stake in the next few years _Telegraph

So what is Obama doing to fix the US' economic problems? He is doubling down on stupid by shutting down a big new oil pipeline from Canada. Not only does this new "Marie Antoinette-esque" policy hurt American energy, industry, and jobs, but it threatens to rile up Canada as well. While in keeping with an overall Obama policy of energy starvation, taking this action at this time makes the US President look even more foolish than usual.

PHMSA is mandating that TransCanada provide a detailed “restart plan,” conduct “mechanical and metallurgical” testing, and analyze the pipeline components that failed last month.

In addition, the order instructs TransCanada to conduct a review of its entire pipeline system within 60 days, among other things.

The order comes at a politically sensitive time for TransCanada. The company is seeking federal approval to expand its Keystone pipeline to carry Canadian oil sands from Alberta to Texas.

The proposed project, known as Keystone XL, is currently undergoing a multi-agency review that is being headed up by the State Department. Comments on the project’s latest layer of environmental review are due by Monday. _The Hill

When combined with the Obama administrations attacks against offshore oil drilling, shale oil fracking, new nuclear reactor design approval, coal plants and new coal technology etc. -- this latest attack on the importation of Canadian oil sands liquids reveals the Obama administration as even more anti-energy than Jimmy Carter.

In the meantime, Obama's crew continues to promote expensive and unreliable solar and wind energy mega-projects technologies -- presumably in an attempt to prevent these funds from reaching other energy projects which might actually supply usable and reliable energy to the American economy.

Of course, never attribute to ideology what could more easily be explained by corruption: One of Obama's biggest financial supporters and public fans, General Electric, is heavily invested in big wind energy and is diving into big solar. The administration is always happy to supply waivers and grant favours to those who are willing to play on the team.

Meanwhile the rest of the US economy is floundering, with no help to be found from an administration of corrupt revolutionaries without a clue.

More: Brian Wang describes the significant buildup of Canadian oilsands production. The Obama - Salazar - Reid policy of energy starvation never made very much sense. If these stuck-on-stupid idiots remain at the controls of US energy policies for much longer, the US may have to join the Organisation of Third World Countries.

More 6June11: More on the political / faux environmental forces lining up in opposition to the Keystone XL cross-border project (including map). With such a large and influential part of government and society promoting suicidal energy policies, the rot will be difficult to excise in time to prevent significant hardship, unless an electoral and taxpayer revolution occurs in the next 2 years.

Which Form of Energy is the Safest?

WaPo_via_NextBigFuture
At least a small part of the news media is finally moving away from nuclear hysteria. The Washington Post (via Brian Wang) has decided to break away from the pack and present a more honest look at the dangers associated with the different important forms of power generation.

History suggests that nuclear power rarely kills and causes little illness. That’s also the conclusion engineers reach when they model scenarios for thousands of potential accidents.

Making electricity from nuclear power turns out to be far less damaging to human health than making it from coal, oil or even clean-burning natural gas, according to numerous analyses. That’s even more true if the predicted effects of climate change are thrown in.

Compared with nuclear power, coal is responsible for five times as many worker deaths from accidents, 470 times as many deaths due to air pollution among members of the public, and more than 1,000 times as many cases of serious illness, according to a study of the health effects of electricity generation in Europe _WaPo

Of course, Brian Wang does a better job of explaining the issue than the Washington Post, as you might expect. Brian reveals that even wind, solar, and biomass energy production have killed many more than nuclear power.

The only two deaths associated with the Fukushima reactors incident were caused by the earthquake and tsunami. Compared to 9.0 earthquakes and 50 ft. tsunamis, nuclear power is as safe as a mother's arms.

It is important to point out that the damning statistics aimed at coal are computed by Lancet authors -- a journal which has not compiled the most trustworthy public health stats over the past 10 years. And yet, even if coal deaths are being over-estimated by a factor of 10, they are still significant when compared to nuclear.

Future use of integrated gasification combined cycle (IGCC) coal plants will slash pollution from coal use. And a new method of using waste fly ash from coal -- turning it into a high value, life-saving product -- will cause the informed public to look at even that ugly waste product differently.

Even with 40 year-old reactors, nuclear power is the safest source around by far. Imagine how much safer nuclear could be if Mr. Obama's NRC ever got off its fat, lazy, pompous arse, and did its job?

Cross-posted to Al Fin Energy

The US is #1 in Hydrocarbon Resources Worldwide: Why Is the Obama Administration Pursuing a Policy of Energy Starvation?

EnergyTribune
A new report from the Congressional Research Service points out that in terms of total hydrocarbon resource, the US possesses the largest inventory of any nation on Earth. But under the Obama regime, an unstated but unrelenting program of "energy starvation" is being carried out -- from the DOE to the Department of Interior to the EPA, even including the NRC. It is one thing to be energy-poor because you lack the resources. It is quite another to intentionally cripple your own economy using half-baked policies of carbon hysteria, nuclear fear, and faux environmental crisis fabrication.

From coal to gas to oil to methane hydrates to kerogens, bitumens, uranium and thorium, the energy resources of the US remain largely untapped in comparison to their potential.

America’s combined energy resources are, according to a new report from the Congressional Research Service (CSR), the largest on earth. They eclipse Saudi Arabia (3rd), China (4th) and Canada (6th) combined – and that’s without including America’s shale oil deposits and, in the future, the potentially astronomic impact of methane hydrates.

...if the White House is in any way serious about impacting the economic Black Hole that is the burgeoning national debt, reinvigorating business big-time, creating real jobs and restoring ebbing national wealth, the best shot by a distance if you’re American ... well, you’re standing on it, or rather above it.

...While the US is often depicted as having only a tiny minority of the world’s oil reserves at around 28 billion barrels (based on the somewhat misleading figure of ‘proven reserves’) according to the CRS in reality it has around 163 billion barrels. As Inhofe’s EPW press release comments, “That’s enough oil to maintain America’s current rates of production and replace imports from the Persian Gulf for more than 50 years”. Next up, there’s coal. The CRS report reveals America’s reserves of coal are unsurpassed, accounting for over 28 percent of the world’s coal. Much of it is high quality too. The CRS estimates US recoverable coal reserves at around 262 billion tons (not including further massive, difficult to access, Alaskan reserves). Given the US consumes around 1.2 billion tons a year, that’s a couple of centuries of coal use, at least.

...In 2009 the CRS upped its 2006 estimate of America’s enormous natural gas deposits by 25 percent to around 2,047 trillion cubic feet, a conservative figure given the expanding shale gas revolution. At current rates of use that’s enough for around 100 years. Then there is still the, as yet largely publicly untold, story of methane hydrates to consider, a resource which the CRS reports alludes to as “immense...possibly exceeding the combined energy content of all other known fossil fuels.” According to the Inhofe’s EPW, “For perspective, if just 3 percent of this resource can be commercialized ... at current rates of consumption, that level of supply would be enough to provide America’s natural gas for more than 400 years.”

...With 85 percent of global energy set to come from fossil fuels till at least 2035 no matter what wishful thinkers may prefer, current US energy policy – much like European – is pure political pantomime. _EnergyTribune

Adapted from an article at Al Fin Energy

Is North America the New Energy Kingdom?

With rising production from shale fields, the U.S. surpassed Russia last year to become the world’s largest supplier of natural gas. Shale now accounts for 10 per cent of the country’s natural gas production – up from 2 per cent in 1990. Chesapeake’s production from its next Texas project, expected by the end of 2012, will by itself supply the energy equivalent of 500,000 barrels of oil a day. _Globe&Mail

We know that Canada is overflowing with hydrocarbons from shale oil to oil sands to coal to natural gas to methane hydrates.... But the US was supposed to be "all tapped out" ever since oil production peaked back around 1970. Is it possible that all of the peak oil and peak energy doomers who foretold the end of US oil & gas may have been a bit premature?

U.S. domestic production for the year will be 140,000 barrels a day higher than last year (which was 410,000 barrels a day higher than 2008). Although the U.S. Energy Information Administration (EIA) says U.S. production will decline next year, who knows?

...As an article last month in The New York Times observed: “Just as it seemed that the world was running on fumes, giant oil fields were discovered off the coasts of Brazil and Africa, and Canadian oil sands projects expanded so fast, they now provide North America with more oil than Saudi Arabia. In addition, the United States has increased domestic oil production for the first time in a generation.” Further still: “Another wave of natural gas drilling has taken off in shale rock fields across the United States, and more shale gas drilling is just beginning in Europe and Asia.”

...For natural gas, the U.S. has the four largest fields in the world: the Haynesville field in Louisiana (with production up by 77 per cent in 2009); the Fayetteville field in Arkansas and the Marcellus field in Pennsylvania (both with production up by 50 per cent); and the Barnett field in Texas and Oklahoma (with production up by double-digit increases). The EIA reports that proven U.S. reserves of natural gas increased last year by 11 per cent to 284 trillion cubic feet – the highest level since 1971.

Beyond shale oil and shale gas, there’s the awesome energy promise of methane hydrates, frozen crystals of water and gas that lie beneath the northern permafrost and beneath oceans floors around the world in quantities that boggle the imagination.

“Assuming 1 per cent recovery,” the U.S. Geological Survey says, “these deposits [in U.S. territory] could meet the natural gas needs of the country (at current rates of consumption) for 100 years.” _Globe&Mail

Gas producers are scurrying to find ways to export gas to cold, hungry customers in Asia and Europe. LNG -- liquified natural gas -- is one approach which is being developed for the export market. GTL -- gas to liquids -- is another approach that is likely to be developed inside the US within the next 10 years. Both approaches will allow for easier entry into the lucrative export markets. The GTL approach will also -- if economical -- allow gas to be converted into liquid fuels at a profit. That should help reduce North American dependency on overseas oil, once developed.

Cross-posted to Al Fin Energy

Natural Gas -- The Eternal Flame

The world is swimming in hydrocarbons. One modest sign of the richness of shale gas deposits is this waterfall in western New York state, where a natural methane seep provides an eternal flame for hikers. US shale gas has become an amazing economic and geopolitical phenomenon, with money to be made across large swathes of the lower 48 states. Homeowners who heat their homes with gas have also had a lot of reasons to be happier about their energy bills over the past two years or so.

Waterfall photo credit: Jessica Ball, as lovely as she is tough.

Just one of the amazing "gold rush" shale gas deposits in the US will be highlighted in a television documentary on CNBC November 23 2010.

Oil vs Gas MMBTU
Natural gas is significantly cheaper than oil, per unit of heat energy, as seen in the graph above. Someone who could economically convert gas to liquids (GTL) might be able to take advantage of that price difference and make a lot of money.

Robert Rapier recently highlighted the Shell Oil GTL plant in Malaysia, and made reference to the larger Shell GTL plant to be completed in 2011 in Qatar. If the price of oil continues to be much higher than the price of gas -- in energy units -- such GTL conversion plants could well pay off.

Given the large amount of natural gas which is flared into the atmosphere every year, some intriguing new approaches to on-site conversion of GTL at gas wells -- including offshore wells, may offer a profitable income stream for smaller producers and individual wells.

It has been proven that natural gas is constantly being generated deep beneath the Earth's crust -- inside the hot mantle. We do not yet know how much of that gas penetrates into the crust to the point of economic extraction by humans, but it is likely to prove significant, in the opinion of Al Fin energy analysts.