Tag: "natural gas"

Reducing Europe’s Dependence on Russia, Benefits United States

As tensions over the situation in the Ukraine heightened over the last few months, sanctions were thrown left and right between Russia, the United States and the European Union. The sanctions targeted the Russian banking and energy sectors, putting pressure on Russian President Putin’s inner circle.

Since the sanctions, Russia has lost $75 billion in capital worth, faces weaker direct investment and is teetering on the brink of recession, according to the BBC.

Unfortunately, Russia wasn’t the only one impacted by the sanctions. As one of the biggest energy suppliers in the world, Russia ranks in the top five producers of both petroleum and natural gas and is a huge energy supplier to the E.U. Sanctioning Russia could very well backfire on many E.U. nations.

So the question remains: how can the global community, and in particular the U.S., take action against Russia without risking E.U. economies?

According to Stephen Cheney’s Wall Street Journal op-ed, the answer is simple: expediting the export of liquefied natural gas (LNG) from the U.S. to the E.U. and its neighbors.

Oil and natural gas sales accounted for 68 percent of Russia’s total export revenues in 2013, according to the U.S. Energy Information Administration (EIA). From natural gas alone, Russia took in $73 billion last year.

The U.S. has seen booming growth in the natural gas industry over the past few years, and that growth is only expected to continue. According to Cheney, a recent Citigroup study predicted that the U.S. energy industry would add 665,000 new jobs and be a net exporter of energy by the end of the decade, and that by 2035 $115 billion would be added to the U.S. gross domestic product.

Creating U.S. LNG exports would transfer $4 billion in wealth from Russian consumers to European consumers, according to a 2013 Deloitte study. Additionally, says Cheney, reducing Europe’s dependence on Russia would increase the national security of both the U.S. and its allies. Yet the U.S.’s restrictive export laws only allow exports to be sent to nations with which the U.S. has a free-trade agreement, or after a lengthy permit process to ensure the export is within “the public interest.”

If opening up U.S. exporting restrictions to allow U.S. companies to export liquid natural gas could increase natural security, add jobs, and increase the security of our allies, shouldn’t that fall within “the public interest?”

Megan Simons is a research associate at the National Center for Policy Analysis.

Oct 29, 2014 | 2 comments | by Lloyd Bentsen

Lower Energy Prices Help Many Americans Stay Warm

Many Americans struggle during the winter with expensive and excessive consumption of energy resources to keep warm. Inflated energy prices really puts a strain on many families and their budgets. However, this upcoming winter will be a bit easier to get through, thanks to the fracking boom.

Propane prices are 24 percent and consumption is 13 percent lower.
Oil price reduction allows a 15 percent reduction in heating oil energy spending.
Homes will use 10 percent less gas and 5 percent gas bill reduction.

The recent fracking boom has not only lowered energy prices for consumers, but also benefited the United States economy. Fracking’s benefits are very important to American consumers. This benefit will increase as fracking technology advances and the option to export our natural resources becomes more of a reality.

Oct 08, 2014 | 2 comments | by Lloyd Bentsen

DOE Must Expediate LNG Export Permits

The United States Department of Energy (DOE) finalized reforms it proposed on May 29 to its process for determining whether planned Liquid Natural Gas export projects are in the national interest as reported in Oil & Gas Journal:

Liquid Natural Gas (LNG) export proposals are presumed to be in the national interest under the Natural Gas Act.
This excludes countries that do not have a free-trade agreement (FTA) with the United States.
DOE has conducted an informal review for more than 30 years, and has issued eight conditional authorizations for LNG exports to non-FTA countries in the last 3 years.

However, The Center for Liquefied Natural Gas expressed serious reservations about the direction of the Department of Energy’s procedural landscape in response to the proposed reforms becoming final and said:

The Department of Energy could improve regulatory certainty by instituting a policy of prompt approval for final non-FTA export permits once the applicants have completed their National Environmental Policy Act reviews.
Continued regulatory uncertainty is not beneficial.
The development of these projects and the economic benefits they will deliver to this country should be expedited.

Aug 25, 2014 | 1 comment | by Lloyd Bentsen

Heavy Ozone Regulation Hurts

A recent study by the National Association of Manufacturers found that the new ozone regulation from the Obama Administration could have a very high cost in jobs and to the economy. The NERA Economic Consulting report found that a stricter new ozone regulation could:

Reduce U.S. GDP by $270 billion per year and $3.4 trillion from 2017 to 2040.
Result in 2.9 million fewer jobs per year on average through 2040.
Cost the average U.S. household $1,570 per year.
Increase natural gas and electricity costs for manufacturers and households across the country.

New oil and natural gas production could be significantly restricted in parts of the country classified as “nonattainment” areas, limiting supplies of critical energy resources and potentially driving up costs for manufacturers and households.

The study found that restrictions to new natural gas production from tighter ozone regulations, in combination with the costs to reduce emissions, could:

Reduce the present value of GDP by nearly $4.5 trillion through 2040, result in a loss of 4.3 million job equivalents per year and cost households $2,040 annually.
Increase industrial natural gas costs by an average of 52 percent and electricity costs by an average of 23 percent over what they would be if the ozone standard was unchanged.

Heavy regulations like this one, cost too many jobs and wrecks the economy. Businesses will choose to go to other countries with friendlier business environments. Further negatively impacting our economy in the long run. We must look at the bigger picture and see the other side of the issue and understand that more harm than good is achieved through many existing regulations like this new one.

Aug 18, 2014 | 3 comments | by Lloyd Bentsen

Europe’s Necessary Energy Dependence Switch

Now is the time for the United States to break the Middle East and Russian dominance of global energy supply. Providing our energy resources to Europe would break the old global energy system and bring Europe geopolitically closer to the United States. The National Review’s “Marshall Plan for Energy”, explains that the U.S. has the resources and the timing is right assist in economic and political stability in Europe through energy resources.

Over one-third of Europe’s oil and natural gas comes from Russia and other countries of the former Soviet Union.

Imports from Russia have grown 10 percent in the past decade, while imports from elsewhere of LNG (the liquefied form of natural gas) have fallen 50 percent.
Shipping 2 million barrels of American oil to Europe per day would cut the E.U.’s dependence on Russian petroleum in half.
Sending just over 2 trillion cubic feet of America’s natural gas to Europe annually would halve the E.U.’s reliance on Russia’s gas pipelines, many of which cross Ukraine.
U.S. oil production is the fastest growing in the world and has risen by 3 million barrels per day in just four years.
U.S. natural-gas production has jumped by 4 trillion cubic feet per year over the past four years, also entirely on private and state lands.

Aug 11, 2014 | 1 comment | by Lloyd Bentsen

Creating Reliance on U.S. Energy

The world that exists today is one of open barriers, and intertwined economies that become necessary in foreign policy. The more entwined economies get the more resistance there is for justifying conflict with each other. It just gets too expensive. It is one of the reasons that a conflict with China is not very realistic despite what some media outlets may say. The best way to accomplish this is through trade of a good, and the U.S. is producing the most sought after good of all, energy. Many countries around the world are recognizing the need for U.S. energy, and Chile just became the latest.

Where many Latin American countries such as Brazil and Venezuela are rich in natural resources, Chile is actually the poorest boasting a measly 150 billion barrels of oil and 3.46 billion cubic feet of Light Natural Gas (LNG). In order to cover for the shortfall the country is turning to light natural gas, and the United States to fill the gap. In the 1990’s the primary provider of LNG for Chile was Argentina and was delivered through a pipeline. Due to domestic shortages in Argentina, Chile had to change its reliance to countries that were further away such as Qatar, Yemen, and Equatorial Guinea.

By creating lasting economic relationships with the Americas, the U.S can help meet their energy needs. In addition to energy requirements, Latin American Counties such as Chile are also making changes to its environmental regulation that resembles the policy of the United States.

LNG is proven to provide a tremendous amount of benefits when comparing to coal and oil. LNG is cheaper than oil, and produces little to no carbon dioxide emissions which have come under fire lately in the U.S. government. While the process of fracking does leak the greenhouse gas methane the amount of leakage varies from 2 to 8 percent. According to a study by the Recorder, if methane leakage is 2 percent then after 55 years the amount of carbon reduced compared to coal use is a staggering 55 percent! While 8 percent leakage of methane still produces a benefit of 17 percent reduction over a course of 100 years. This brings up an extremely interesting scenario; can the U.S. cut the reduction of the planet’s carbon dioxide levels from exporting LNG?

Many in the U.S. continue to go on and on about solar and wind energy, when the facts are simple. The technologies cost billions in research still, do not provide the power that existing energies do, and increase costs for consumers. Even worse to imagine is that these problems are in the U.S. Where we have the most advanced technology in the world, rational thinking would prove that other countries around the world will continue to use both coal and oil.

That is where natural gas exportation comes in. By allowing exports of natural gas, and increasing relations with several countries that have high carbon dioxide emissions, we can curb emissions through the free market. It is a fairly easy thing to accomplish within the government as well. The country would be able to sell cheap, affordable clean energy, and reduce emissions while increasing quality of life in developing countries. It is past the time of easing economic regulations; in order to create prosperity in these countries it must be done utilizing free trade.

The U.S. is at an amazing time in its history where unemployment has hit a 6 year low and 200,000 jobs are being created monthly due to our spur in energy innovation. Markets around have a pressing need for our own labor capital and energy resources. It is time to meet that need.

Jul 07, 2014 | 1 comment | by David Weisser

Fracking Provides a Safe and Environmentally Friendly Energy Source

As recently as a decade ago, many scientists believed the U.S. was running out of oil. Peak oil was a major concern and many questioned whether the U.S. way of life was at risk. Hydraulic fracturing (fracking), developed more than 60 years ago, has eliminated fears of running out of oil. Although fracking was impractical and very expensive when first developed, it has become more feasible in the last few years due to technological advancements and rising oil prices over the last decade, leading to an 800% increase in shale gas production over the last decade. Fracking has led to an economic resurgence in many places across the country. And while oil and gas has to be removed correctly, using gas collected by fracking reduces greenhouse gases more than burning coal.

But that is not enough for some environmental groups who see fracking as a dangerous detour on a path to 100% renewables. The Green Party has complained that fracking squanders water. While fracking does use water, the amount of water used to drill all 3,000 Marcellus wells in Pennsylvania (and obviously not all are being drilled at the same time) equals the amount of water used by residents of Pittsburg in one year. Additionally, fracking is using the water once consumed by shuttered industries such as steel manufacturing which have been offshored or curtailed by the EPA. In fact of the 9.5 billion gallons of water used daily in Pennsylvania, natural gas consumes 1.9 million gallons or two thousandths of one percent.

Others claim natural gas is dirty. Actually natural gas is much cleaner to burn than oil or gasoline. It emits half as much carbon dioxide, less than one third the sulfur oxides and one percent as much sulfur oxide as coal. While the fracking process does release some excess methane, a good portion can be prevented by sealing condensers, pipelines and wellheads.

Fracking will not cause water wells to blow-up as in did in the movie Gasland. In the movie, the Colorado home’s well was actually drilled directly into a naturally occurring pocket of methane. The drilling occurred before any fracking in the area. Hollywood is not in the business of fact checking. As long as companies use stronger cement and processing casings to ensure an impermeable seal, the methane cannot move into anyone’s home.

Finally, some claim that fracking will lead to radioactive drinking water. While shale has a radioactive isotope, tests of treated water and brine in New York and Pennsylvania found no elevated radiation levels. The treatment of water used in fracking makes the presence of significant amounts of radiation impossible.

While fracking requires following strict protocols, the natural gas supplied has been a boon for the United States. Fracking is cleaner than oil and coal, increases energy supplies and enhances economic activity. Some of the purported claims of the anti-fracking crowd are scare tactics created by those who have an economic incentive to see fracking fail.

Jul 02, 2014 | 4 comments | by Baruch Feigenbaum

Fair and Equal Energy, GOP Proposes Ending All Tax Breaks

Senator Mike Lee (R-UT) recently proposed new legislation that would end all $16 billion dollars in subsidies on energy, restoring a free market energy sector.

Ordinarily, when legislation such as this is mentioned it is directed at the renewable sector only, allowing oil companies to retain the billions they receive. However, this bill will end all oil and gas subsidies as well, allowing competition to return to the sector. Now the government will be unable to pick winners and losers in the market.

Source: “60 Years Of Energy Incentives,” Management Information Services for the Nuclear Energy Institute

Credit: Alyson Hurt/NPR

Since 1950, the U.S. government has provided and astonishing $837 billion for energy development, over half of that being oil and natural gas. However, his bill also reduces taxes for these companies which could prove balanced out in the long run.

This is not the first time something like this has been tried. In 2012, Congressman Mike Pompeo of Kansas attempted the same plan and ultimately was referred to the House Subcommittee on Energy and Power. Senator Mike Lee has quite a few more tricks up his sleeve as he currently has 34 sponsors on the bill. He does have opposition however in that many senate democrats and republicans want to extend biofuel subsidies for at least one more year. In order to have a truly effective bill, all government assistance has to be cut.

While renewables were once viewed as the future of U.S. energy, the recent oil and gas boom has taken over the economy. In 5 years alone, oil production on state and private lands has soared an astonishing 61 percent, and natural gas production has risen 33 percent.

May 05, 2014 | 5 comments | by David Weisser

Russian Energy Out, American In

The political climate between Russia and the rest of the world has deteriorated significantly in recent weeks. However, unlike the war methodology of the early world, economic sanctions are the new way to hurt countries.

Russia’s economy is largely dependent on natural gas and oil, producing nearly of 70% of total exports in 2012, 32% of which was crude oil. The majority of these exports go to Europe, as they are wholly interdependent on Russian energy. In order to meet the demands of a full Russian blockade on energy, the European Union would need to invest 215 billion dollars to meet their own energy demands. Even though there is a vast natural gas market to be explored by U.S. companies, the required approvals could take as long as 2019. The companies who have submitted approvals to congress are still having to wait the required times for natural gas.

The closest to exporting is the company, Cheniere Energy, Inc, who can begin exporting as early as 2016. Even if U.S. companies were able to export crude, it would serve only as a motivator because it would take just as long to increase production to sustainable levels since the U.S. still imports 2.7% of its GDP in oil. The European Union is almost identical in its imports. However, if the U.S. were to come together with Mexico and Canada a strong partnership could be created a lot sooner.

Congress needs to act quickly on allowing permits because of the European Union’s plan to become energy independent. If the U.S. can begin exporting oil and natural gas quickly then the E.U. would be allowed several years of planning before making risky investments. It is also extremely important to note that while natural gas can be moved by pipeline easily to countries such as Mexico and Canada; there currently exists no infrastructure for exporting to Europe. This makes things even more complicated as it would require billions in research and development.

While it may seem farfetched, the possibility of energy exports to Europe has increased in recent weeks. There is currently a bill proposed that would automatically approve all received natural gas export projects. Since Europe does not have free-trade agreement with the U.S., it would open up the market to all approved companies. Europe has a mounting deficit in energy production, and with Russian relations rocky, the outlook for US companies looks extremely promising. There is a strong push in the U.S. to end the 40 year ban on crude oil, which is the most efficient way to handle the mounting European energy crisis. It would allow a stronger partnership between allied countries and increase the amount of crude production in North America. It would also create the incentive needed to allow U.S. companies to explore and produce for global markets, rather than just the United States.

There is a strong fear that ending the ban would increase domestic prices but this is not true. Not only would ending the ban create nearly a quarter million jobs but there would be a strong push to increase production and supply, which would level prices in the long term.

Apr 09, 2014 | Leave a Comment | by David Weisser

Diminishing Returns to Dam Building and Other Supply Solutions

“Megadam Projects not Successful” highlights what many in Texas and elsewhere will see as an inconvenient, but critical, truth: there are diminishing returns to structural solutions to water scarcity problems. One reason that it is inconvenient is that there is a lot of money in dam building, and another is that water planners and municipal purveyors are not used to the demand-side approaches to make sure that demand will not exceed supply even in a worst-case-scenario drought.

Sole reliance on supply-side solutions to meet that mandate means the environmentally and fiscally costly construction of some projects that will sit idle most of the time. There are two alternatives that become more and more economically efficient as additional water supply projects come on line:

Provision for permanent and temporary market-based re-allocations of existing water rights, which means true private ownership of water consumption rights. Water price differences, or lacking those, water use value differences, will signal which way true markets would move water. It would not be a mass-movement because the prices are changed by the re-allocations, sometimes significantly by small reductions in sellers’ water use. For example, a relatively small re-allocation of irrigation water can slightly increase the value of agricultural water while massively decreasing the cost of municipal water.
For water supplies like municipal utilities and irrigation companies, provision of some discounted interruptible service. The option to buy a mix of non-interruptible and discounted interruptible service has been long-time standard fare in industries like natural gas that are much less vulnerable to the double whammy of simultaneous increase in demand and decrease in supply that comes with drought.

But gas providers and users are spending their own money, whereas government-run water purveyors spend someone else’s money. So, as water projects come online it eventually becomes cheaper to provide discounts for service that is interrupted in specified drought conditions than to have a nearly-always idle water project on standby for a rare situation.

Mar 31, 2014 | Leave a Comment | by John Merrifield

Tag: "natural gas"

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