June 18, 2010 at 11:23 am #2620
by David Baumann McClatchy-Tribune News Service.June 17, 2010
With oil fouling the Gulf of Mexico and U.S. oil dollars spewing into the Middle East at the rate of $700 billion per year, America’s energy policy is in dire need of practical and cost-effective alternatives to oil.
Financier T. Boone Pickens thinks natural gas makes sense. In his “Pickens Plan” television commercials he states, “natural gas is cleaner, cheaper, abundant, and it’s ours.”
But is Pickens right?
Is natural gas cleaner than oil? The only byproducts of burning natural gas are carbon dioxide and water. Natural gas does not produce the complex unburned hydrocarbons that are common in burning oil and its derivatives (requiring catalytic converters on cars and trucks), nor does natural gas produce sulfur dioxides or nitrous oxides present in coal emissions. Natural gas produces only half the carbon dioxide for the equivalent heat produced by coal and 70 percent of that produced from burning oil. In terms of greenhouse gases, natural gas is definitely cleaner.
At the same time, of course, no energy source is completely free of environmental side effects, as evidenced in this case by local concerns about water quality where natural gas drilling is occurring. Care must be taken to safeguard water resources in gas-producing areas.
Is it cheaper? At $4.94 per one million British thermal units (BTUs), the July 10 price on the New York Mercantile Exchange, natural gas is a bargain. We currently pay approximately $12 to obtain one million BTUs from oil. Oil has historically commanded a premium over natural gas because oil has a higher energy content per unit and is easier to transport.
According to industry officials, even natural gas extracted from shale – a common rock formation that is less permeable and porous than the more traditional sand reservoirs – is economically viable at a price of $6.50 to $7. This is still 40 percent cheaper than oil.
Is natural gas more abundant? Today, the total recoverable natural gas reserves in the United States are around 2,000 trillion cubic feet. Of that about three-quarters of the total are from traditional gas reservoirs and approximately 500 trillion cubic feet from shale reservoirs.
Shale gas “plays,” or areas where companies are actively looking for natural gas in shale rock, have been under way for more than a decade in Louisiana, North Dakota and Texas. California is another promising location. The newest shale gas play is the Marcellus field in the Appalachian Basin in the eastern United States, sometimes referred to as “the beast of the east.”
Recoverable reserves in the three state area – stretching from West Virginia through Pennsylvania to New York – could be as much as 500 trillion cubic feet. This would double the known shale reserves and boost total U.S. recoverable reserves to more than 2,500 trillion cubic feet.
Is it ours? Compared to America’s domestic oil reserves, which stand at a three-year supply, the United States has at least a 110-year supply of natural gas within its own borders. We are not dependent on anybody else, anywhere, for any of this.
So it appears that T. Boone Pickens’ claims are true. Natural gas is cleaner, cheaper, abundant, and it’s ours.
Considering the benefits to U.S. national security and the environment, U.S. energy policy should increase it focus on natural gas. It may not be “the” solution to America’s energy problems, but it’s part of the solution.
David Baumann is a research associate at the American Institute for Economic Research, 250 Division Street, Great Barrington, Mass. 01230;
(c) 2010, American Institute for Economic Research. Distributed by McClatchy-Tribune Information Services
June 30, 2010 at 2:20 am #5561
This isn’t an Opinion on Nat Gas as a Solution – it is more propaganda and miss-information on the facts around Nat Gas.
The first falsehood is the soft-peddling the really bad environmental effects Hydrofracking Shale is having on US water resources and the second is this mix-up of facts on Nat Gas reserves & cost.
Nat Gas only has 298 TCF of PROVEN reserves – the 2,000 TCF is Estimates/UNPROVEN/Forecast of reserve size from the same industry folks that always over-estimate potentials. The Shale NG unproven estimates are about 1/3 or 616 TCF out of the 2000 TCF. The US demand/production is about 19.8 TCF/year with 3 TCF coming from the Coal+Shale unconventional resources or ~10%. When you do the math on Proven vs Demand its only 10 years supply not the 100 years – that amount comes from assuming all 2,000 TCF is recoverable & will become proven a cross between fantasy & stupidity. There was a 10% increase in the non-conventional Shale production which happened at the same time NG demand remains low as result of destroying the Fertilizer & Chemical demand due to price spikes into the $10-14.5/MMBTU range. This also points out that the 100 year supply depends on US demand staying at 2007 low levels which cannot happen within recovering US economy & large increase in use driven by these over-expectation of supply.
Now lets talk about the lack of environmental truths on the production of Nat Gas in these shale fields. You notice this liberal / clean energy based opinion on Nat Gas as the solution had a single sentence that mentioned some impact to water resources. The truth is that there is large crisis brewing from both the nat gas escaping into nearby water wells/streams/sources and from the fracture fluid that seeps or is improperly disposed of by companies like Noble Energy/Haliburton/Williams Energy/Cabot Oil & others. Worse no one is watching because Dick (good name for the guy) Chaney as VP pushed the addition into Energy Bill for excluding Nat Gas exploration from falling under clean water & other acts (Now called the Haliburton loop hole).
But you cannot blame it only on that adminstration because the current one continues the practice to push clean energy as way to shut down oil use in the US. The liberal press & media is also performing a defacto black out on this issue because they support the clean energy agenda – none of the lawsuits/issues from homeowners/people impacted from nearby development in the nearly 30 states impacted by the developing companies like Noble & Haliburton who are becoming examples of why there needs to be oversight & control. Luckily there are several independent film /documentary’s showing how these average folks water out of the faucet can be set on fire with match, or bubles in streams (looks like carbonated water) can also catch fire & have killed large numbers of birds/fishes/frogs ect. Nearly 40 Trillion Gallons of Frack fluid used in drilling in states like Colorado/Arkansas/Deleware/Wyoming & ect isnt being investigated by EPA or folks who are susposed follow dramatic changes like this. Water was already on US critical list & before someone takes it serious it is going to go full crisis mode.
Everyone knows I am not fan of over-hyped environmental claims but this has become an expample that the liberals are just as bad as the Oil companies they bash at looking the other way when the end results achieve thier agenda.
October 6, 2010 at 6:04 am #5479
While natural gas emerges as one of the cleaner energy solutions for generating power worldwidein fact it is the cleanest burning fossil fueldemand across the globe is on the rise. Further, converting natural gas to liquefied natural gas (LNG) ensures the successful transportation of the much sought after energy source. However, with high prices for LNG, some companies may still be sceptical.
October 6, 2010 at 3:13 pm #5478
RE Mazirra/Tech Conulting Services
Sorry but everyone knows that is load crap used in self serving brochures or talking points for Green Energy companies or Environmentalist. Even US with strong NG supplies cannot afford any sizeable switch to NG without driving price thru roof and other users out of business.
NG is a limited source worldwide and its use for power is only as last resort and makes that plant too expensive for industrial power in export products. The worldwide position has two extremes – most places either dont have enough or lack infrastructure to use in any capacity (Residential, Industrial, Chemical ect) or they are Energy producers that have to either burn or export LNG. The site value for gas going into LNG must be less than $0.90-1.80/MMBTU so that the cost to store/conver/transport LNG stays under $4.50/MMBTU that it has to deliver at in order to be competative with alternate fuels. Even when companies take the plung and invest in this infrastructure – the exporting countries always find better value use before it pays out & install petrochemical plants or P/L to regional residential or industrial users.
All folks that put in USGC LNG facilities betting on Russian NG exports are now going bankrupt in the short term underpriced NG market and by the time economy recovers Russia will installed the Summer tankage it needs to keep the NG for heavy winter Europe demand.
The only Long Term price support is driven by the environmental fraud posing as Global Warming/Climate change which is trying to impose huge unnecessary penalities in form of equipment investment or emission offsets. Since all the top major world emitters are now developing countries exempt from these issues they are unlikely to switch to sources NG they do not have.
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