NC Media Watch

Prop 23 Update: Renewable Energy Money Pit is Almost Empty

Russ Steele

During the Prop 23 vs AB-32 debate conservative bloggers warned the once the subsidies ran out the corporate interest in wind and solar would decline and than vanish. This morning P. Gosslin at The NoTricksZone blog has a English tranlation of a German language article in the German Technology Review.

The article starts with this introduction:

Companies of the finance-intense sector of renewable energy are getting their supply of cash cut off. Investors are opting for lower risk projects.

Gosslin's post continues: 

Almost everywhere globally governments are scaling back programs that support renewable energies.”
And so it’s only normal that venture capital companies are now opting out. Investment strategies are changing. Technology Review writes:

Germany, Italy and Spain are reducing subsidies, in America the money from the 2009 stimulus package is slowly running out.”

According to Technology Review, people want quicker returns and less risk. Well who doesn’t? Technology Review writes:

During the last years many finance companies began, however, to invest in long-term projects with high capital requirements. That only worked mainly because they were able to expect subsidies from the state. Thus hundreds of millions flowed into start-ups in solar technology, which first had to build expensive plants to get the technology ripe for the market. The profits came later, if at all.”

Now the state subsidies are shrinking and new startups will have little chance of competing against the already established companies – too risky. The bubble has nowhere to go but to implode. So watch the politicians soon scramble and start blaming “speculators” and “greedy finance companies” for the mess they themselves created, and then start calling for more financial regulation.

It is no wonder that Al Gore has "gone postal" his dream of huge profits have collapsed along with the flight of investors. We warned this would happend, but the proponents of AB-32 assured voters that it would not happen.  Now what?  Obama is killing coal power, the EPA is trying to stop the development of shale gas with the banning of proven drilling techniques, and now investors are running from renewables. One has to ask, What Now? 

An energy and job creation lesson for California

Russ Steele

Peter Grover writing at the Energy Tribune -- Emission Control, We Have a Problem discusses an important connection to energy and wealth creation, which has a direct connection to job creation. He focus on Romney failure to understand the connections, but Grovers analysis could also apply to California's Democratic political leaders.

Take Mitt Romney’s hopping around over energy and climate during his opening event of the 2012 campaigning season on June 6. Front-runner (by a nose) for the GOP ticket he may currently be, but in the knowledge of energy stakes he’s already running on empty. Speaking at his first town hall event in Manchester, NH, Romney said how he “believed the world’s getting warmer”, that it’s “important to reduce our emissions of pollutants and greenhouse gases” and, most intriguingly, how he envied “European-style energy efficiency”. For a man whose electoral chances rest on his claimed grasp of economics, Romney’s “beliefs” don’t appear rooted in well-articulated mathematical facts.

ooo

If Romney and co knew their economics as well as they claim, they would understand the direct correlation between the level of energy consumption and national wealth creation. As I have said elsewhere “The relative wealth and poverty of nations is entirely definable by its per capita energy consumption”. Romney, like many of his associates, does not appear to understand that U.S. energy demand is not just the result of its wealth but also its cause. The speedy industrialization in China, India, Brazil and elsewhere strives for the same end: greater national wealth, for which it will need increasing sources of preferably cheap but efficient energy. Why else has China been on a global shopping spree for hydrocarbons while the West tries yet again to make windmills pay?

I think that Romney's failure to undestand the connection of energy consumption and wealth creation, which produces jobs, has also escaped our Democratic leaders in Sacramento.  Wind and solar cannot provide the energy needed for business to prosper in California, which will in turn creates the jobs needed for an economic recovery.  Being liberals, our Democratic leaders appear to be a mathematically challenged as Romney. 

Peak Energy Update: Southern CA oil oozing out of the rocks

Russ Steele


One has to wonder if it might not be better to pump the oil and use it, rather than just let it ooze out of the rock and on to the beach.  I thought that oil on the beach was a national disasters requiring emergency clean up acton by the government, spurred on by wailing environmentalist demanding reparations by those nasty oil companies.

I guess with no oil companies to blackmail, oil on he beach is OK with the environmentalist and their rent seeking lawyers.

H/T Real Science for the photo

Peak Energy: Six X increase in natural gas in 10 years - technology to the rescue

Russ Steele

We have had an ongoing debate about the future of fossil fuels on this blog for years.  My position was that technology would save us from blighting the landscape with bird shredders and destroying desert habitat with acres of solar panels, all which were only capable of a marginal contribution the energy needs of California.

Now Michael Lind has some insight in a article : Everything You've Heard About Fossil Fuels May Be Wrong at Salon

The arguments for converting the economy to wind, solar and biomass energy have collapsed.  The date of depletion of fossil fuels has been pushed back into the future by centuries -- or millennia. We may be living in the era of Peak Renewables, which will be followed by a very long Age of Fossil Fuels that has only just begun.

Are we living at the beginning of the Age of Fossil Fuels, not its final decades? The very thought goes against everything that politicians and the educated public have been taught to believe in the past generation. According to the conventional wisdom, the U.S. and other industrial nations must undertake a rapid and expensive transition from fossil fuels to renewable energy for three reasons: The imminent depletion of fossil fuels, national security and the danger of global warming.

What if the conventional wisdom about the energy future of America and the world has been completely wrong?

As everyone who follows news about energy knows by now, in the last decade the technique of hydraulic fracturing or "fracking," long used in the oil industry, has evolved to permit energy companies to access reserves of previously-unrecoverable “shale gas” or unconventional natural gas. According to the U.S. Energy Information Administration, these advances mean there is at least six times as much recoverable natural gas today as there was a decade ago.

Read the rest of this excellent article here.

Scamed by the envrios again - public duped by Gasland movie

Russ  Steele

We have been having an on going discussion about the safety of fracking as portrayed in Gasland a An Oscar-nominated movie. Gasland, implies that fracking contaminates our water supply with chemicals.  That is not what John Strossel found out in his Fox News Investigation. He writes about it in a Reason On-line article.  Shale Gas Fracking - Who Can We Trust?

The movie Gasland implies that fracking contaminates our water supply with chemicals. In the movie, some homeowners are shown setting their tap water on fire. This got investigative report Strossel's attention, and he writes:

I've seen Michael Moore's movies and environmental documentaries, which I thought were nonsense. But Gasland is more convincing. I thought it merited discussion on my Fox Business show last week.
 
Unfortunately, Gasland producer Josh Fox turned down my invitation, as did representatives of the big national environmental groups that oppose fracking. I think I know why. The movie and the left's arguments against fracking are deceitful.

First, the movie implies that nasty chemicals get into the water table. That seems logical, since they shoot them down into gas wells. But it turns out that the shale gas wells are thousands of feet below the water table. Do the chemicals flow up—against gravity?

But then what's the explanation for the most dramatic part of the movie: tap water so laden with gas that people can set it on fire?

It turns out that has little to do with fracking. In many parts of America, there is enough methane in the ground to leak into people's well water. The best fire scene in the movie was shot in Colorado, where the filmmaker is in the kitchen of a man who lights his faucet. But Colorado investigators went to that man's house, checked out his well, and found that fracking had nothing to do with his water catching fire. His well-digger had drilled into a naturally occurring methane pocket.

What Strossel found out was that 40 percent of the wells in Pennsylvania have some sort of naturally occurring methane gas, so the fire in the faucet was not caused by fracking, yet that is what the movie is all about. Once again the left has used a fake documentary to dupe America.

The enviro's mission is to shut down oil and gas drilling, especially shale gas which in abundance is driving down the cost of natural gas, making alternative enegy highly uncompetitive without expensive subsidies.

Exit Question: Were you duped by Gasland?

A recommended read at Reason.com - fracking is good!

Russ Steele

Our local left came against fracking during the Prop 23 Campaign, claiming that it was destroying the ground water.  This Reason.com article by Ronald Bailey is worth the time to read so you are well armed at the next cocktail party, or water cooler discussion, on the danger of fracking. It is not the fracking, but the leaky casings. Those casings are easily fixed.

Environmentalists Were For Fracking Before They Were Against It

Shale gas is still the bridge fuel to a low-carbon energy future.  So far we have about 250 years of shale gas, more than enough time to develop low cost alternatives to fossil fuels. But, once again technology has allowed us to escape peak energy. What is next?

Over the e-mail transom: Cut big oil tax breaks or drill, baby, drill?

Russ Steele

This arrived in the morning e-mail, a discussion on the best approach to reducing gas prices at the pump, cut oil company susidies or drill baby drill.

Guests:

Rep. Tom McClintock, (R – CA’s 4th district); member of the House Committee on Natural Resources

Phil Verleger, David E. Mitchell/EnCana Professor of Management at the University of Calgary's Haskayne School of Business

Brian Johnson, senior tax policy advisor, American Petroleum Institute

Clicking here will take you to Southern California Public Radio web site and click on the Download slider to hear the discussion.

Warming, this is public radio, and most of the call ln listeners are liberals. Tom handles them with class without breaking a sweat.

Peak Energy Update: Post-petroleum reality check

Russ Steele

Our local post-petroleum hand wringers are spending a lot of energy trying to convince the community we need to be preparing for a post-petroleum world by building sustainability gardens, chicken coops, and returning to a world before we had cheap energy. 

Alliance for a Post-Petroleum Local Economy is a grassroots group concerned about the repercussions of declining oil and natural gas in Nevada county.

As I have written before we are not running out of fossil energy resources with enough gas, coal, and oil  for over 500 years when shale oil reserves are considered. It might not be a cheap as it once was be we are not running  our of fossil energy reserves any time soon. The Congressional Research Service just published a new report that the US has the largest fuel reserve on earth. We just lack the political will to capture and use them.

Bruce McQuain at Hot Air has posted a summary of this reality in a report by Peter C. Glover in the Energy Tribune. Glover’s analysis of a recent Congressional Research Service study confirms that
we have hundreds of years of oil, gas and coal.

Glover writes:

In case anyone missed it, let me repeat something that is of a magnitude of 10 on the scale of news-quakes for Joe Public USA: 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.

The energy facts in the CRS report should be making front page news all over America. Mostly it isn’t. Given the devastating news from Japan and New Zealand, it may be right to postpone dancing in the streets. But something else is going on. Even though they are going to dominate global energy supply for decades to come the insidious war on vital fossil fuels continues apace.

While A.P.P.L.E is wasting time and energy to solve a non-existing problem for the near term generations, we have enough oil to maintain America's current rates of production and replace imports from the Persian Gulf for more than 50 years, without considering the shale oil reserves.

If Methane Hydrates are considered the US has enough Natural Gas for 400 years, and enough accessible coal for over 200 years.  America's recoverable coal reserves are estimated to be 262 billion short tons, and this does not consider the vast coal resources in Alaska, estimated to be 3,200 billion tons. For perspective, the US consumes just 1.2 billion short tons of coal per year.

With hundreds of years of oils and natural gas resources in the US, why are the folks of APPLE trying to scare local folks into returning to an early 19th Century lifestyle?

More Energy Boondoggles from Obama Adminsitration

Russ Steele

The Power Line is one of my regular blog reads everyday as John, Scott and Steven usually have some cutting edge analysis of national and mid-western issues. They have this analysis of the Presidents Economic Report (ERP) by  Ken Haapala, Executive Vice President of the Science and Environmental Policy Project. Ken's comments on the Report:

The ERP promotes the development of solar and wind, but has significant omissions:

* The ERP omits any plan for sensible development of the huge oil resources in the United States and its off-shore boundaries.

* It omits stating imported oil is principally used as a transportation fuel - less than one percent is used to generate electricity. Generating electricity from solar or wind does not significantly reduce the need for transportation fuels.

* It omits any plan for promoting the construction of modern nuclear power plants to include the recycling of nuclear fuel.

* It omits any discussion of the poor 120-year economic history of wind-generated electricity - erratic wind power was always rejected by consumers demanding reliable, affordable electricity.

* It omits the staggering investments China is making in traditional sources for generating electricity. The EPR emphasizes China's development of solar and wind but ignores massive investments in nuclear, coal, and hydro. This omission leads to the false assertion that the US is in a race with China for wind and solar power.

* It omits any rigorous economic discussion of the difference between government expenditures and government investment. Expenditures are exactly that, they may create jobs and prosperity for a few, but not for the general public. Successful investments create general prosperity yielding far more to the general public than the cost. Replacing coal plants which reliably generate affordable electricity with wind farms or solar plants that unreliably generate more expensive electricity is an expenditure, not an investment. Such an action is no more an investment than replacing the reliable family car with an exotic, expensive, high-maintenance sports car. It may create jobs for some but at the expense of the family.

* It omits any discussion of an existing technology that can economically store electricity on an industrial scale. Without one, spending heavily on solar or wind is speculation.

In short, the EPR does not provide a path to a prosperous energy future, but a path to a boxed canyon that will make the US uncompetitive in the world markets.

It would be wise for California Legislators to read Ken's comments, as there are some valuable messages for our future.  Especially with growing concern over the safety of nuclear.

Peak Oil Update: Can we drill our way out of this economic mess?

Russ Steele

Steve McCann writing at the American Thinker:

. . . the United States is sitting on the world's largest untapped oil reserve.  A natural resource that would not only mitigate the over $400 Billion sent overseas to other countries but could create untold millions of jobs and put the country on a sound financial footing.

The untapped reserves are estimated up to 2.3 Trillion barrels, nearly three times the reserves held by the OPEC countries and sufficient to meet 300 years of demand, at today's levels -- for auto, truck, aircraft, heating and industrial fuel, without importing a single barrel of oil.

The US could become the single largest exporter of oil and oil related products in the world, thus potentially eliminating its trade deficit, and increasing the national standard of living as well as making a massive dent in the national debt.  

Here is a look at some of the largest untapped reserves:

The Bakken Fields in North and South Dakota.  New drilling and oil recovery technology is making the capture of this oil feasible and some development is now underway.  It is estimated that there is at least 200 Billion barrels of oil in this region.  At a price of $100 per barrel the value of this find is $20 Trillion.

The Outer Continental shelf.  It is estimated that around 90 billion barrels of oil sit beneath the ocean bed 50 to 100 miles off the shore of the Atlantic, Pacific and Gulf coasts.  The value: $9 Trillion.

The Alaska National Wildlife Refuge.  About 10 billion barrels are locked up here with a current value of $1 Trillion.

Tar Sands:  Around 75 Billion barrels of oil could come from these areas which are similar to the Canadian tar sand fields and which now produce about 2 million barrels per day.  The value:  $7.5 Trillion

Oil Shale.  This is the most massive area of potential oil production in the world with an estimated 1.5 Trillion barrel potential.  The technology necessary to extract this oil is now in place and being operated on a pilot project basis.  The value of this resource:  $150 Trillion

There also the very real potential that further finds will be discovered as technology continues to improve.

In total the value of the potential oil reserves of the United States listed above exceeds $187 Trillion.  The current national debt is $14.2 Trillion or less than 8%.

We have created this economic mess and we can drill our way out of it, the only issue is our current lack of political will. We have let a highly vocal environmetalist minority to control our future, and it is time for the adults to take control.  We have the technology, lets man up and create the political will!