Monday, October 31, 2011

Natural Gas Production Passes Coal: Historic Milestone

The rise of gas is creating new milestones.  The latest EIA data confirms that US natural gas production will produce more energy than US coal in 2011.  

This is a notable change, since coal for nearly 30 years had produced more energy measured in BTUS than gas.

In 2010, coal and gas were essentially tied, though EIA data had gas producing a tiny bit more in that year. This year will break the tie.

While the US produces domestically more energy from coal and natural gas than oil, when imports are included, oil remains the fuel of which America consumes more than any other.  Oil, Gas, Coal, Renewables, and Nuclear in that order are the fuel on which America runs.

Big Week Upcoming On Drilling Fee and Municipal Zoning

This week will see a big effort by Republican leaders to move a bill enacting a drilling fee and new limits on local zoning authority of gas drilling by municipalities.  Raising revenue and local zoning limits are being linked.

The action is in the Senate first, but negotiations involve the Speaker of the House too, in an effort to fashion a bill that can be passed with Republican votes and leave the Democrats on the sideline.

Apparently a sweetner for Southeast Pennsylvania Republicans will be some money--not clear how much--for Growing Greener, the popular program that invests in environmental improvement projects.  The money somehow would be raised for this statewide program through the county fee.

Depending on the details concerning the fee, the amount for Growing Greener, and limits on zoning, this bill will be controversial or highly controversial.  Its prospects are uncertain, even though considerable muscle is being put behind this effort to pass a county-based drilling fee.  Stay tuned.

Weekly Facts Rodeo

In our interconnected world, the most important  news for the USA was in Europe where the world economy once more was at the abyss:

1. European leaders "create" a $1.4 trillion bailout fund to prevent an Italian, Spanish or Greek default in a near desperate attempt to save the Euro. Just  one detail left to figure out: From where will the money come?

2. Europe goes with tin cup extended to China and Middle East looking for money to capitalize the $1.4 trillion bailout fund, a truly historic moment that underlines the wealth created by oil and the rise of Chinese manufacturing and exports. World power shifts to those with money.

3. Private European banks "voluntarily accept" a 50% loss on all Greek debt. Greece must pay back all debt owed to the International Monetary Fund and European Central Bank.

4. The Bottom Line in Europe is that for another few weeks a monetary collapse has been averted that would have triggered another collapse in global consumer demand, more deflationary pressure, and another round of massive job loss.  But will it work? Nobody knows.

5. Meanwhile in the USA, GDP grew a higher than expected 2.5% in the third quarter.  But incomes declined a worrying 1.7%, and a decline in the savings rate financed consumer demand expansion. Not clear at all that the growth is sustainable.

6. On the field a great weekend for Pennsylvanaia: Pittsburgh goes to 6-2, with a brutal game against the Ravens next; the Eagles dismantle the Cowboys to reach 3-4; and PSU remarkably sits at 8-1, with Nebraska, Ohio State, and Wisconsin left.

7. Off the field, Penn State ranks number 1 in Fulbright Scholars.  Congratulations!

Sunday, October 30, 2011

National Economy Grows But PA Economy Reverses

The surprisingly good third quarter national gross domestic product numbers underlined how poorly the Pennsylvania economy is performing.    National GDP rose 2.5% from July to September, the fastest growth rate this year, but Pennsylvania's unemployment rate that had been steadily declining from January 2010 to April 2011 jumps from 7.4% in April to 8.3%  in September.

Pennsylvania is now clearly underperforming a still struggling national economy.  What makes Pennsylvania's recent poor economic performance startling is that Marcellus job growth is real and for about 8 years the Pennsylvania economy did better or as well as the US economy.  But not anymore.

The 2011-12 state budget that brought to Pennsylvania Austerity Economics is proving to be a major economic mistake even in the short run and a bigger blow in the coming years.  That budget destroyed 14,000 jobs in education alone and tens of thousands more in other industries.  It fails to invest in transportation, water and sewer infrastructure, alternative energy  that all are major drivers of job creation. 

Meanwhile at the national level, the 2.5% increase in GDP for July to September was higher than expected and the strongest growth rate this year.  The US economy is now back to its pre-crash size but obviously 3 years later. Yet, the national economy is far from out of danger but at least is growing modestly. 

Unfortunately major policy errors in Pennsylvania have meant that our economy worsens despite national growth and significant Marcellus job creation

Friday, October 28, 2011

2011 Is The Year Of Record Setting Energy Production

The USA will produce more gas in 2011 than ever before in a single year but also more wind, more solar, and more total renewable energy than ever before, according to EIA data released yesterday. energy/data/monthly/pdf/mer.pdf.

Ethanol and biodiesel production will also set all time highs. Nuclear production reached a record level in 2010 but will not set a new record in 2011.

Natural gas will supply about 23 quadrillion BTU, and power production renewables will provide about 9 quadrillion BTU. The US is the largest producer of natural gas in the world.

US oil production is even turning up, breaking a 35-year long decline in the most recent years.

Coal production by contrast is on track to decline to pre-1985 levels and electricity production from coal may dip to the pre-1998 mark.

The year 2011 will see many energy production records fall and be the year of energy champions.

Natural Gas & President Obama

"Is the EPA and President Obama trying to shutdown natural gas production?" Like the question about whether Pennsylvania's rivers are glowing with radiation caused by drilling, the question about the EPA and President Obama is regularly asked, despite the fact that 2011 is going to be the record year for natural gas production.

President Obama and his EPA is doing a lousy job of shutting down the gas industry if that were their goal. Consider further these facts:

2009, 2010, and 2011 were 3 of the 4 highest years of gas production in the history of the United States. In 2010, natural gas passed coal to provide more energy for the USA for the first time since the early 1980s. All that on President Obama's watch.

But this data does not prevent the Wall Street Journal from printing as its featured letter to the editor just yesterday one that said: "President Obama has been very candid about his view, which essentially is that oil and gas industry must be stopped--regardless of the effects on our economy and national security."

The foregoing is as crazy as saying that gas drilling caused Pennsylvania's streams to be polluted with radionuclides. The nation is so polarized and the warring political camps speak often only to themselves that crazy is normal.

Thursday, October 27, 2011

Uncle Sam Slims Down Energy Consumption

Has America structurally lowered its energy consumption? Or are recent declines in total energy consumption temporary, driven by transitory economic difficulties? Energy executives with profit and loss responsibility in particular should focus on these questions for few things drive revenues more than sales.

No matter the cause, the US declines are significant, with 2011 consumption rolling back to about 2000 levels. Importantly the US trend is counter the global trend. US and European energy consumption is flattening or declining, while global demand rises fueled by large increases in China, India, and the developing world

I am in the camp that falling US energy consumption and declining oil consumption reflect powerful structural changes in the US energy marketplace that will be sustained for the next 10 years at least. I include in that structural change gasoline prices over $3 per gallon, increasing fuel substitutes for oil, and major initiatives that are making vehicles, businesses, institutions, homes, and individuals use energy much more efficiently.

Examples of these structural changes abound. Last week, the New York Public Service Commission reauthorized New York's Energy Efficiency Portfolio Standard. Then 32 founding colleges began a $1 billion revolving loan fund and challenge to finance energy efficiency projects at higher education institutions.

New York will reduce electricity consumption in 2012 by the equivalent of 200,000 homes and gas demand by an amount equal to 400,000 homes.  It is all part of its effort to cut electricity usage by 15% by 2015.

Gasoline sales are down again in 2011 when compared to 2010 as consumers manage $3 plus gasoline by buying more fuel efficient vehicles or other means.

Meanwhile US GDP and population are much larger than in 2000. The country has 30 million more people for example. But energy consumption is below 2000 levels.

Appliance standards, lighting standards, rising fuel efficiency standards, green buildings taking off, hundreds of major energy efficiency programs, higher gasoline prices all add up to a big structural change in energy consumption.

Uncle Sam is on an energy diet.

Yet Another Study Whacks Howarth But His Mess Lives On Too

A new paper by researchers at the University of Maryland becomes the latest to join a growing science posse trying to correct the enormous damage done to science and public understanding by Professor Howarth of Cornell University when he released his study finding gas to be as dirty as coal for carbon emissions.  For the University of Maryland Paper go to

Joining a chorus of disagreement to Professor Howarth's work, the University of Maryland researchers say: "Arguments that shale gas is more polluting than coal are largely unjustified." 

A key assumption among many shaky or false assumptions of Howarth and his colleague, Professor Ingrafea, in their study was that shale gas had a massively higher fugitive emission rate than conventional gas.  The Carnegie Mellon University study financed by the Sierra Club and released in August found this assumption to be false for Marcellus shale wells. 

Now the University of Maryland researchers report similar findings to Carnegie Mellon University on the point of whether shale gas wells have higher fugitive emissions and say: "We have demonstrated that the fugitive emissions from the drilling process are very likely not substantially higher than for coventional gas."

Professor Howarth and Ingrafea's paper is already considered to be junk by researchers in the area and reviled by some for the damage it has done to science.  But their mess lives on.  Their paper is constantly cited by the popular press.  More than a few mainstream environmental groups will not tell their members that this study should not be trusted, fearing what would be real blowback from members.

And so many good people believe that in terms of at least carbon pollution, gas is as dirty as coal when coal is twice as dirty on a life cycle basis as gas. 

In truth, the Howarth piece has as much scientific integrity as a typical hit piece on global warming science does.  Both betray science and the climate.

New Water Testing Again Disproves NYT Radiation Scare

The NYT radiation scare lives on in the minds of many, as regularly people still incorrectly write or say that drilling polluted or threatened to pollute Pennsylvania's waters with radionuclides.   For example just yesterday I was asked by a reporter, "what about the radiation pollution of your water by drilling?"

My surprising answer to the reporter was that Pennsylvania's waters were never polluted with radiation or radionuclides and that large amounts of testing, especially by the Pittsburgh Water and Sewer Authority, proved my statement to be correct. 

The Pittsburgh Water and Sewer Authority has been conducting monthly testing of both river water and tap water for 4 radionuclides regulated by the Safe Drinking Water Act: Combined Radium 226 and Radium 228, Gross Alpha, Gross Beta, and Uranium.

PWSA testing began in March.  PWSA posts its radionuclides test results on its website at or  The most recent test results are for August.

PWSA testing confirms that levels of the 4 radionuclides regulated by the Safe Drinking Water Act in both river water and tap water are safe.

Pennsylvania American Water Company did the same testing at 5 drinking water plants in Western Pennsylvania, as did about 14 other drinking water suppliers.  The Pennsylvania Department of Environmental Protection conducted too radiation testing of river water in 7 streams.  Waters in western Pennsylvania have probably been more tested for radionuclides than any in the country.

The test results all arrive at the same conclusion: the water is safe.  It is not polluted with radiation.

But the NYT radiation scare will live on and never die in the minds of many, especially since the NYT will not run a story saying the scare it caused was false.  Once a lie is released, the truth rarely catches up.

Wednesday, October 26, 2011

Shale Gas in 2005 Is Where Solar Is Today.

Except for a precious few who saw it coming when it was distant, shale gas was like a big whale that breached with no warning, swamping conventional business, policy and understanding. Indeed until 2005, Exxon held to its view that US gas production had peaked.  Until 2008 sophisticated investors were banking on US gas shortages that imports would meet and were spending billions to build LNG import facilities.

Out of the equivalent of the blue ocean depths, the shale whale suddenly appeared, bringing a domestic gas glut and crashing natural gas prices.   Still today there are naysayers, but almost exclusively outside the gas and energy industries, who believe shale gas is somewhere between a fraud and hype. Others of many stripes hope fervently it is one or the other, since shale is disruptive and destructive to the best laid plans.

Just like shale gas surprised, competitively priced solar is going to burst on the scene and be greeted with disbelief and shock by many, including in the energy business, even though its coming arrival is plain to see.

To put this in shale gas terms, solar is today around where shale gas was in 2004 or 2005, when some shale production had started but it amounted to less than 2% of total US natural gas production, and when the first test wells in the Marcellus were being drilled.

Solar is producing, with close to 4,000 megawatts  installed in the USA and 40,000 megawatts installed globally by the end of 2011.  But the solar industry is refining and testing just like the shale gas industry was around 2005 when it drilled test wells in Pennsylvania.

Gas and solar are to some strange, irreconcilable companions. A few, however, see them as reinforcing forces that together are going to change the world powerfully in the next 20 years.  The wise were not surprised by how quickly market forces drove forward shale gas and will not be surprised by the speed and strength of solar's advance. 

Opportunities are ahead.  But creative destruction is too.  Who will be ready for both and who will not?

The Citizens Marcellus Commission Issues Useful Report

The Citizens Marcellus Commission issued a report that is well worth reading.  Go to  Co-Chair Dan Surra also did an excellent job of explaining the report to members of the media and the public.

Plainly there are some sharp disagreements between the Citizens Marcellus Commission and the Governor's Marcellus Commission over issues like pooling, the amount of tax/fee revenue and the uses of the revenue, and possibly local zoning, further leasing of state forests, and drilling in state parks.

But the Citizens Marcellus Commission Report provides a basis for what could be a useful dialogue between people with quite different views about gas production and its role in our energy choices.  Such a dialogue would not produce a consensus, but it would create greater understanding, narrow some differences, and even find some common ground.

I appreciate the work of those involved with this Report. They have opened a door for more constructive dialogue. Thank you.

Tuesday, October 25, 2011

Koch Funds Confirm Hockey Stick Validity

The validity of Professor Mann's hockey stick showing rapid, recent warming has been recently confirmed by three separate studies, including the blockbuster study just released by Professor Muller and partially funded by the Koch brothers. Muller's data is also reportedly virtually identical to Professor Mann's hockey stick.

Professor Mann and Penn State University have been subjected to unrelenting, vicious, and false attacks by conservative groups and politicians within and without Pennsylvania. The odds are high that some of the attacks were fueled by Koch money, though some groups doing the attacks will not reveal any of their funding sources.

Justice lives. Thank you to Professor Muller and even the Koch Brothers for confirming the hockey stick.

Marcellus Lowers Gas Prices and Summer Electricity Prices in Northeast

EIA states, "In the Northeast, wholesale natural gas prices were down between 2% and 15%, reflecting both lower regional demands and growing natural gas production from the Marcellus Shale play."

Lower natural gas prices also contributed to lowering spot market electricity prices in Pennsylvania, New York and New England by 3% to 15%, according to EIA.

The consumer benefit in natural gas costs and electricity costs of the Marcellus supply can also be seen by contrast. Look at gas prices in the Southwest and California.  EIA states, "Natural gas prices were about 4-7% higher than last summer in the Southwest and California markets and supported modestly higher wholesale power prices in those markets."  Power prices were up to in these regions by 2% to 5%.

Natural gas prices impact electricity prices more than any fuel. In turn natural gas provides about 24% of all electricity generated and about the same percentage of all energy produced.  But natural gas plants often set the entire market price for electricity at any given hour, because frequently a natural gas plant is the last unit needed to meet the demand for electricity.  Natural gas plants are said to be many times on the "margin of the market."

Natural gas power plants will virtually always bid into the electricity market a price that allows them to recover the cost of natural gas they burn.  Consequently higher natural gas prices become higher electricity prices and the reverse is also true.

For median income families and those in poverty, as are 24% of USA's children, energy prices are important, even life and death.  I spent my first 6 years in the workforce working with poor and struggling families and  sat across a lawyer's desk seeing a mother weep because her gas, electricity, and water services were all shutoff.  The price of natural gas matters a lot.  We all should remember that.

Math Guarantees Solar Will Be As Big As Shale Gas

Solar at 6 to 8 cents per kilowatt-hour will capture enormous electricity market share and make central station power plants a declining business, as David Crane, the CEO of NRG that owns power plants said in Virginia on October 18th.

But will solar hit those price points? And when?

Solar is at the 10 cents per kilowatt-hour price in Arizona, after a 30% to 40% decline in the last 12 months. Another decline of 30% to 40% and solar would be at 6 to 7 cents per kilowatt-hour.

Another 30% to 40% decline in solar prices is insured, since solar prices have been declining steadily for 20 years, and the pace of lower prices is quickening due to economies of scale and large investments in the industry. A rule of thumb is that solar prices decline 1% per month and that the efficiency of panels increases by 0.5% per year. Lower prices but more power production year after year.

Projecting an annual decline in solar pricing of 6% to 12% is reasonable and would mean in about 4 or less years solar will be in the 6 to 8 cents per kilowatt-hour where it is a deeply disruptive, creatively destroying resource. The math guarantees solar soon will be as big as shale gas is today.

Monday, October 24, 2011

Solar Hits 10 Cents Per Kilowatt-hour

If you want to see why solar by 2015 will be as big as shale, take a look at solar pricing in Arizona. Arizona has a virtually unmatched solar resource and is reaping low solar power prices already.  New utility scale solar facilities are generating solar at 10 cents per kilowatt-hour.  That price includes no tax credits or any subsidies.

Electricity rates of 12 to 18 cents per kilowatt-hour are common from California to Maine so solar at 10 cents will be attractive just on economics alone for many consumers. Hawaii which still depends on expensive and dirty oil for a lot of electricity has had rates from 20 to 30 cents per kilowatt-hour.

The 2011 Arizona solar price has fallen sharply from 14 to 16 cents per kilowatt-hour in 2010.  The lower prices are leading to a solar boom in Arizona that will install 240 megawatts of solar this year, according to Suntech, a major solar company.

But the key is not today's 10 cents solar price but the continuing price declines. Those continuing price declines will make solar as big an energy event as shale gas is today.

Must Read: Major New Marcellus Drinking Water Impacts Study Released

A study done by researchers at Penn State University for the Center for Rural Pennsylvania sampled 233 water wells in 20 counties for impacts from gas drilling.   What are its findings?

In the Marcellus wars, it probably will be spun in both directions.  To avoid spinning, I will quote key sections from the Executive Summary.

"In this study, statistical analyses of post-drilling versus pre-drilling water chemistry did not suggest major influences from gas drilling or hydrofracturing (fracking) on nearby water wells, when considering changes in potential pollutants that are most prominent in drilling waste fluids." (Page 4)

Unlike the Duke Study, the PSU study found no correlation between distance from drilling and methane contamination of water wells. "When comparing dissolved methane concentrations in the 48 water wells that were sampled both before and after drilling...the research found no statistically significant increases in methane levels after drilling and no significant correlation to distance from drilling."  (Page 4). 

I suspect the different outcomes between the Duke and PSU studies may have a lot to do with the county location of wells.  Duke conducted its analysis in the few counties where confirmed gas migration cases are concentrated.  PSU's study used water wells in 20 counties.

The researchers further state, "The research found that bromide levels in some water wells increased after the drilling and/or fracking. These increases may suggest more subtle impacts to groundwater and the need for more research. Bromide increases appeared to be mostly related to the drilling process. A small number of water wells also appeared to be affected by the disturbances due to drilling as evidence by sediment and/or metals increases that were noticeable to the water supply owner and confirmed by water testing results.  Increased bromide concentrations in water wells along with sporadic sediment and metals increases were observed within 3,000 feet of Marcellus gas well sites in this study." (Page 4). See further discussion at pages 16 to 19.

The researchers speculate the source of the bromide may be drilling muds used in the drilling phase and kept at well pads.  The researchers call for more research on this issue.  Whatever the source, stopping it should be the top priority.

The researchers also found that 40% of the water wells tested prior to drilling "failed at least one Safe Drinking Water Act water quality standard, most frequently for coliform bacteria, turbidity, and manganese..."  The researchers also found methane in 20% of the pre-drilling water wells, "although levels were generally far below any advisory levels."

The Center for Rural Pennsylvania is an agency of the Pennsylvania General Assembly.  I recommend reading the report.

Weekly Facts Rodeo

1. For the first time in the history of the Gallup poll, a majority of Americans support the legalization of marijauna.  57% of Democrats; 57% of Independents; and 55% of men favor legalization.  People over 65 and Republicans strongly oppose legalization.  Any thoughts?

2. IQ average scores are 30% higher today than in 1910 and 18% higher than in 1950, reported Seth Borenstein of the AP on Sunday.   That means a person who has an average IQ score today would have been rated a genius in 1910.  Reducing hunger among pregnant women and children to insure better brain development, better health care, less smoking and drinking during pregnancy, and less pollution in the air and water explain rising IQ scores.

IQ scores also may be much more variable within a lifetime than previously understood, according to a UK study that found scores rising or falling 10% to 20%, depending on mental stimulation or its absence.

3. In the smart move category, USA will have all troops out of IRAQ, with the exception of an embassy protection unit, by December 31, 2011. Not a day too soon.  Troops killed in action exceed 4,000, and war costs approach one trillion dollars. Starting this war was a disaster, dumb to say the least.

4. Rising intelligence may explain why America spent just $2 billion dollars in Libya to depose Gadaffi, had no troops killed or wounded, and got the job done in less than a year.  We certainly were much smarter about Libya than the IRAQ war that began 8 long years ago.

5. What else does rising intelligence mean?  Does it explain increasing support for legalizing Marijuana? Professor Steven Pinker of Harvard in the Borenstein AP piece did not go there but said rising intelligence in populations is a main reason for declining violence around the world.  Pinker's research shows that battlefield deaths were 500 per 100,000 people before nation's formed; 70 per 100,000 in 19th century France (Napoleon and more); 60 per 100,000 in the 20th century; and just 0.3 per 100,000 currently. 

It's a nice trend. But why am I nervous?  Pass the IQ shaker.

6. The PA economy has slammed into reverse. It has been performing much worse than the national economy since April, 2011 when the state unemployment rate was 7.4%.  PA's unemployment rate jumped 0.9% from April 2011 to September 2011 when it hit 8.3%.  PA lost 15,500 jobs in September.  We need to get out of reverse and use all the tools that were creating lots of jobs in Pennsylvania from January 2010 to April 2011 when PA was a national jobs leader.

7. Professor Muller used Koch Brothers funds to do a deep dive of the earth's temperature records.  He may not be getting any more Koch money. A probably former darling of climate skeptics, Muller who is a physicist from the University of California Berkeley released his results:  The earth has warmed 0.91 degrees celsius. The rate of warming is accelerating and now at a rate of 2.84 degrees celsius for the next century.  Muller's results confirmed all the scientific work on temperatures done by NASA, NOAA, and Britain's Hadley Center that had been regularly attacked by Koch organizations.  These are ugly facts but facts.

Saturday, October 22, 2011

Koch Funded Study Proves Again Global Warming & Apologies Should Be Next

Scientific American said of physicist and climate skeptic at University of California-Berkeley: "Muller's views on climate have made him the darling of the climate skeptics."  That probably explains why Professor Muller received a $150,000 grant from the Koch Brothers that partially funded the Berkeley Earth Surface Temperature Project.  Other funding included support from Bill Gates' Foundation.

Muller has now released 4 scientific papers ( that confirm the scientific work done by the National Oceanic and Atmospheric Administration, NASA's Goddard Institute, and the Hadley Center for Climate Prediction and Research in Britain.  Muller specifically states his findings rebut the charges that the climate records have been manipulated or incorrectly presented.

Muller makes the following findings:

1. Global average land temperatures have increased 0.91 celsius degrees.

2. The rate of warming is accelerating and warmed over the last 40 years at a rate of 2.76 celsius for a century, after warming at a rate of 0.73 degrees celsius for the entire 20th century.

3. There has not been a cooling since 1998.  Instead the rate of warming has accelerated to 2.84 degrees celsius from 1998 to 2010.

The science that the world is warming and the rate of warming is irrefutable.  Professor Muller's BEST papers now pose a challenge to the honor of those who have funded and spread global warming junk science.

Will the global warming deniers such as Governor Perry, Senator Inhofe, George Will, and most of the conservative movement who often attack the left for adhering to junk science confess their error?  Will people like Governor Perry who have smeared scientists by saying that they have manipulated temperature data to gain income apologize for their reckless, false charges?

For the rest of us, the Muller BEST data is the worst kind of good news.  While it shreds the global warming deniers of all integrity, it confirms once more that substantial warming has taken place, the rate of warming is accelerating, and that our climate is changing in ways that can cause major economic and natural damages.

Friday, October 21, 2011

PA Loses 15,800 Jobs In September

Pennsylvania was among the top states creating jobs from January 2010 to April 2011 but now is a leader in losing jobs, as our unemployment rate shoots up.

The September jobs report for Pennsylvania is just ugly. Our unemployment rate increased again to 8.3% from 7.4% in April. Worse still Pennsylvania lost 15,800 jobs in September and ranked third in lost jobs. New Jersey was close behind, losing 11,100 jobs.

Twenty four states added jobs in September and 25 states saw their unemployment rates fall. Since April 2011, Pennsylvania's economic performance has been worse than the nation as a whole, with the 0.9% jump in our unemployment rate among the worst in the nation.

The enormous state cuts to education that destroyed 14,000 education jobs and the decline in spending for road and bridge repairs are part of the explanation for why the Pennsylvania economy has slammed into reverse since April.

EPA Should Set Zero Untreated Discharge As Drilling Wastewater Standard

Yesterday the EPA stated that it would set standards for the discharge of shale gas wastewater by 2014 and coal bed methane wastewater by 2013. My first reaction is, why take so much time?

And my second reaction is: zero discharge to rivers and streams of drilling wastewater not fully treated should be the standard.

Sometimes technology improvements solve once difficult problems, and that is the case with drilling wastewater. The combination of recycling technology and treatment plants that can turn drilling wastewater into distilled water means that there is no justification to discharge untreated wastewater, including for total dissolved solids, into streams.

The important innovations in water treatment reflect the good work of the gas industry and the pressure to change created by the adoption of Pennsylvania's drilling wastewater rule in August 2010 that ended the decades old practice of discharging untreated for TDS drilling wastewater.

These technology innovations make easy this EPA standards setting. For more information on the EPA docket go to:

NRG CEO Sees 50 Million EVs

The year 2014 will be the pivotal year for Electric Vehicles, according to David Crane, the electricity chief executive who is thinking ahead.

In 2014, Nissan will increase its US electric car production ten-fold to 250,000. If Nissan sells, its production Crane predicts that electric car adoption will be much faster than most now think.

Crane stuck his neck out and predicted that 50 million or more electric cars could be on our roads by 2025.

To position NRG as a fuel supplier to electric cars, Crane has his company rolling out public charging stations in Houston and some other markets.

Early indications are that car drivers like the driving experience offered by this era's electric cars so Crane may be gaining a good first mover advantage. Hertz reports that it would like to have 3,000 electric cars to meet all the requests it receives for EV rentals but only has a small fraction of what it would like. Hertz further states that drivers who do rent an EV have strongly favorable driving reactions.

EVs cost about 3 cents per mile to fuel compared to 15 cents for many gasoline vehicles. Low fuel costs can improve the mood of today's drivers.

Just possibly 50 million EVs by 2025 may come true.

Thursday, October 20, 2011

Energy Tax Breaks Fuel Renewables, Nukes and Fossils Alike

Energy tax breaks are an old virtue or vice of the tax code, depending on where one sits. The amounts to various industries have varied over time, with fossil fuel subsidies being highest in the early 1980s and renewable subsidies the highest in 2009.  But the tax code has constantly had billions of dollars of treats for nuclear power, fossil fuels and renewables.

Fossil fuels biggest year was 1983 when they received over $12 billion in tax credits or subsidies when measured in 2010 constant dollars, according to Robert Stemple's column in the October 16th NYT.  By contrast renewables received little tax code support until the last 10 years.  Renewables biggest year for tax support was 2009, when they got $10 billion.

Both renewables and fossil fuels saw declining tax support in 2010, with renewables securing about $7 billion and fossil fuels $2.7 billion.

Semple also notes that alcohol fuels, mainly corn ethanol, received  $6 billion and energy efficiency $2 billion in 2010.  New nuclear plants have access to massive federal loan guarantees, production tax credits, and more. The tax code has treats for all of America's energy industries.

And what is the money doing?  2010 saw an energy boom in the USA, with rising oil, gas, wind, solar, biodiesel, and ethanol production. Oil imports have declined from 60% to 47% of all oil consumed.  Energy consumption fell to 2000 levels.  Electricity and natural gas prices to consumers have been favorable.

Perhaps these subsidies are delivering value for dollars invested. 

Texas Wind Production Sets New Record

The Texas grid operator confirmed that wind set a new record on the afternoon of October 7th.  Wind supplied 15.2% of the electricity used by Texans during that time, according to the American Wind Energy Association (

Power demand totaled 48, 733 megawatts on the afternoon of October 7th and wind provided 7,400 megawatts.  New wind farms along the Texas Gulf coast amounting to 1200 megawatts now combine with the West Texas wind.  The Gulf coast wind is particularly important and valuable as its production tends to peak in the afternoon time period when power demands are highest. 

For this reason, ERCOT, the Texas grid operator, has urged that more wind be built on the Gulf coast. Duke Energy is building another 402 megawatt Gulf coast wind farm that will begin operations by the end of 2012. 

Wind power requires no water, another important advantage, especially during times of drought, as Texas has been experiencing.

Texas is proving in the real world that wind can provide substantial generation.  Herman Cain might want to pay attention, since he confidently predicted that wind and solar could never provide more than 5% of total power. Others should pay attention too.

Wednesday, October 19, 2011

January Gas Prices Hit Lowest Levels Since 2002

I cannot resist snark. The shale gas "Ponzi scheme" keeps producing huge new supplies and lower gas prices.  Yesterday the January forward natural gas contract for the mid-October date hit the lowest level since 2002, according to the Wall Street Journal.

Back in 2002 shale gas amounted to about 1% of US gas supplies. From 2002 to 2008, prices marched higher, gas imports increased, and the nation prepared to import large volumes of LNG, believing that domestic natural gas supplies were inadequate to meet demand.

Providing 30% of US gas supply, shale gas has changed all that, including $10 or more for a thousand cubic feet.  Thanks to shale gas, this winter will feature low natural gas prices for the 51% of American homes that use natural gas. 

Just look at the prices heating oil customers will pay this winter to see the importance of low natural gas prices.   EIA is projecting that heating oil consumers will pay as much as $3.71 per gallon or $3,000 to $4,000 to get through the winter.  Perhaps oil customers need to be served by a Ponzi Scheme.

Top Electric CEO Says Solar Is As Big As Shale

Sometimes it is the message.  Sometimes it is the messenger.  Solar boosters say  that solar will soon destroy the central station electricity business model but are largely ignored.

No solar activist or booster, David Crane, the CEO of NRG,  gave yesterday a stunning talk at the Virginia Governor's Energy Conference in Richmond.  This top electricity executive said that distributed solar will soon  make central station power plants a declining business.  Crane becomes the first top electricity executive to my knowledge to say the solar revolution is here and now.

NRG is a big electricity generator that owns a nuclear plant and recently wrote off over $300 million when it cancelled development of another nuclear unit in Texas. Crane said that he personally loves nuclear and wished that the cost of new nuclear were not prohibitive.  He is not a solar activist.

Instead Crane is a chief executive who has seen solar power prices plummet to a point where 3 months ago he realized that distributed solar was going to creatively destroy the old central station electricity industry. Crane has his hands personally on the fast-moving solar industry, because NRG is building utility scale solar power facilities in California.

Yet Crane knows that solar's power to transform is that it can be built at homes and businesses and the prices to do so are plummeting. Crane agreed that solar on rooftops or at the business site is going to turn the electric industry on its head and very soon. 

After his talk, I told Crane that solar was going to be as big as shale, and he quickly agreed.  See the very first posting on this blog when I expressed this view.  In terms of the electric industry, solar is indeed the more disruptive technology, since it ends the dominance of the central station power plant.

Just when the Solyndra bankruptcy is being used as a political football to attack solar and green jobs, the truth of solar technology's enormous progress is dawning in the top corporate boardrooms.  Electricity companies without a solar business strategy are doomed to falling sales and revenues.  NRG, however, is a company that sees the opportunity and is transforming itself to profit from the industry transformation ahead.

Gas & Renewables Power Production Surges Again

America is shifting to gas and renewables and away from coal for its electricity.  The latest EIA data shows the shift continues. From July 2010 to July 2011, electricity from gas power plants increased 4.5%, non-hydro renewables jumped 5.8%, and hydro skyrocketed 30% as a result of massive precipitation especially in the Northwest.  Large increases in wind power production are driving gains for the non-hydro renewables.

Electricity from coal declined 1.8% over the same period, even though total electric production rose 2.2%. So far this year coal has provided 43.3% of all electricity. Coal is losing market share to gas and renewables.

The combination of hydro and non-hydro renewables supplied about 14% of the nation's electricity in July 2011.  Gas accounted for about 23%.  Within the next 5 years gas and renewables will together generate more electricity than coal, a real milestone for America's electricity supply.

Tuesday, October 18, 2011

Solar Jobs To Jump 24% Nationally

The good solar jobs news is only beginning. Employment in the solar industry increased 6.8% from August 2010 to August 2011 and is projected to increase another 24%, adding 24,000 jobs nationally over the next 12 months. See the Solar Job Census at

The Solar Census found 100,237 solar jobs, with 50% of solar companies to add jobs and only 2.6% to cut them. Solar manufacturing jobs will increase 14%, installation positions 25%, and sales jobs 35%.

Utilities are increasingly part of the solar and renewable energy industries. Next year utilities project increasing their solar and renewable jobs by more than 10%.

California, Colorado, Arizona, and Pennsylvania lead the nation in solar jobs. Solar is booming globally and nationally. Pennsylvania has a position of solar leadership and can be part of this growth, but neglect of this opportunity will mean solar job loss here and bigger growth elsewhere.

PA Ranks 4th In Solar Jobs...For Now

Though the Marcellus frenzy or hysteria does a good job convincing many otherwise, PA is more than gas. It is a coal, nuclear, wind, energy efficiency, biodiesel, and solar leader too.

PA today ranks 4th in solar jobs, with 4,703, according to the annual solar jobs census done by the Solar Foundation and Cornell University. See

According to the census, Pennsylvania's solar jobs are concentrated in installation and sales with 47% and 25% respectively. About 12% of the Commonwealth's solar jobs are in manufacturing and 10% in research and development.

Pennsylvania has a prominent but shaky position in the solar boom, as California, Colorado, and Arizona are the top three competitor states and have state governments that are embracing solar, while Pennsylvania's may be losing interest. It will be interesting to see where Pennsylvania ranks next year.

Monday, October 17, 2011

North Dakota Shows US Oil Independence Nears

Few know that US oil imports have declined from 60% to 47% since 2005 or that North Dakota will surpass soon Alaska to become the second biggest oil producing state.

Still fewer would accept that the odds are high that America will be free of foreign oil by 2025. How so?

A combination of rising US oil production, booming biofuels, increasing use of natural gas and electricity to power vehicles, and sharply higher fuel efficiency standards make US oil independence by 2025 highly probable.

North Dakota is the curtain raiser on the tight oil revolution with many more shows on the way in other states. North Dakota produces more than 440,000 barrels per day and may soon reach 700,000 barrels.

Declining oil imports will lower the US trade deficit, since oil is the single biggest import. A lower trade deficit will increase US economic growth and raise employment.

Will we use the good energy news ahead to avoid repeating the energy policy mistakes made since the first oil embargo in 1973? Or will the good energy times ahead put us back to sleep and on the road to another rude awakening?

Nox Threatens Marcellus Boom

There is one issue that could stall the Marcellus boom in Pennsylvania.  It is Nox, a pollutant that causes smog.

Last week the Nox alarm sounded once more and more loudly than ever, when George Jugovic testified to the House Democratic Policy Committee that air permits allowing annual emissions of 13,000 tons of Nox from gas drilling had been issued for just Southwest Pennsylvania. Jugovic is the former regional director of the Pittsburgh area Department of Environmental Protection office.

Thirteen thousand tons of Nox is a lot, a bit less than 10% of statewide Nox emissions from all sources. Nox in gas production comes mainly from reciprocating engines running on diesel with poor pollution controls. Regulators and industry must control Nox emissions from gas drilling by using the cleanest technologies and fuels, or the gas industry could collide with the Clean Air Act.

Gas drilling Nox emissions caused serious smog in parts of Wyoming and could do so in Pennsylvania if they are not limited.

The significant new Nox emissions from gas production enter the air shed just as total Nox emissions are declining sharply. Coal plants are installing pollution controls for Nox and other pollutants or being replaced by cleaner natural gas plants.

While declining total Nox emissions creates more time to resolve the gas drilling Nox issue, time to act proactively is short. The gas drilling Nox issue will lead to major litigation and environmental risk that could even endanger the issuance of future air permits needed for gas production unless real action is taken soon. That is the meaning of Jugovic's testimony.

Key Facts Weekly Roundup

1. Herman Cain shakes the political world, as he stakes a strong claim to be the next leader of the free world. He leads the Republican Presidential field in both the NBC/Wall Street Journal and PPP polls with 28% and 30% support respectively, with Romney second, Perry, Paul and even Gingrich still in the hunt. 

2. Perry pulled in $17 million in the quarter ending September 30 and is tied with Romney in cash on hand. It is an impressive haul for Perry, but can he keep raising big money with his polling numbers falling fast?  Cain is breaking all the rules about scheduling and fundraising, going to states that vote later like Virginia and Tennessee, and not camping in Iowa or New Hampshire for all of 2011, as Rick Santorum is doing in Iowa.

3. Hence the establishment and chattering class sneer at the Cain surge by proclaiming Romney inevitably the nominee.  Really?  A lot of Republican voters seem real interested in anyone other than Romney who has the support of 20% to 25% of Republican primary voters.

4. Is too much inequality bad for economic growth? "The Darwin Economy" by Robert Frank cites data indicating that countries with the highest wealth and income inequalities have the slowest economic growth.  The US now ranks among the nation's with the highest wealth inequality.  The 400 wealthiest individuals have more wealth than the bottom 150 million people.

5. US stock markets rallied last week and returned to positive territory for 2011, buoyed by a stronger than expected September retail sales report and a week of successful muddling through in Europe.  September retail sales were likely helped by falling gasoline prices.

6. For every $10 move up or down in oil prices that is sustained for a year, US economic growth rises or falls about 0.2% to 0.3%.  Energy prices matter a lot to economic outcomes.

7. Count me in the camp that holds the US economy will not sustainably recover, until housing prices stop falling and destroying trillions in wealth.  One trillion dollars in wealth evaporated from June 2010 to June 2011 when US housing prices fell another 8%.  Consumer demand cannot withstand such wealth destruction in the single biggest asset held by most US consumers.

8. Steelers and Eagles both win.  Cowboys lose, thanks to the coolest cucumber of them all--Tom Brady who notched another come from behind, last minute victory.  Cardinals keep dancing on the Phillies grave and go to the World Series.

Friday, October 14, 2011

GE Shines On Colorado

And the winner is Colorado for GE's $600 million thin film solar panel manufacturing plant. Pennsylvania was apparently not in the contest. Too bad.

The plant will employ 350 people in solar jobs. Production will begin in 2012 and produce enough solar panels every year to supply 80,000 homes.

Which says more about the future of solar? Solyndra's exit. Or GE's entry.

Do The People Own Mineral Rights Under Public Lands? Some Key Facts

Depending on what kind of public land--forests, parks, game lands--the People of Pennsylvania own greatly varying percentages of the minerals under the public lands.

For example, the Game Commission owns the mineral rights for about 49% of game lands but just 20% of the mineral rights under parks are owned by the people. 

80% of the mineral rights under state forests are owned by the public but just 8% of the mineral rights in the Allegheny National Forest are owned by the federal government.

Managing the surface lands and the mineral rights that are split is a key to getting right the Marcellus.  Drilling in any state park and further leasing of the state forests for drilling are rightly strongly opposed by Pennsylvanians.

Scary Housing Facts & Reagan's Top Economist's Solution

The bursting of the housing bubble in 2006 exposed the outrageous risk taking of "Too Big To Fail" financial institutions and the failure of regulators to prevent both the creation of Too Big To Fail investment banks and their hugely leveraged risk taking.  Plummeting housing prices triggered a chain of events that crashed the economy.  Stopping the still continuing decline in housing prices is essential to any sustainable economic recovery.

Yesterday in the New York Times, Martin Feldstein who was President Reagan's Chair of the Council of Economic Advisers and is a Harvard economist authored a column full of scary housing facts and offered a plan to solve them. 

Housing prices have fallen 40% since 2006.  They fell another 8% from June 2010 to June 2011. About 15 million homeowners owe more than the home is worth.  Among those who do owe more than their home is worth, 50% of them have a home where the mortgage is 30% or more than the value of the home.

All those facts and especially the continuing decline in home prices are terrible economic news.  Feldstein, however, lays out a plan to solve them.  He calls for the government to reduce mortgage principal if a mortgage is 110% of the home's value, with the bank and government splitting the loss, and with the homeowner getting a new but full recourse mortgage--a mortgage where the home plus all assets of the homeowners are collateral. 

This economy will not restart without both auto production and housing returning to health.   The auto industry is healing with annual sales of 13 million cars, up from the depression rate of 9 million cars, but below the pre-crash rate of 16 million cars. 

But until housing prices stop falling and start increasing, our economy will remain in danger of deflation and recession.  Consumers simply won't buy enough goods and services for healthy economic growth when their homes are losing value.

Martin Feldstein's proposal to stop the collapse of housing prices should be read by Democrats, Independents and Republicans.  Is anyone listening to Reagan's top economist's cure for the housing market and hence our economy?

Wednesday, October 12, 2011

Stunning Fact: California Has 100,000 Electric Vehicles

Electric vehicles are becoming common on California's roads.  According to the Los Angeles Times, California has 100,000 electric vehicles registered.  More than 400,000 hybrid vehicles are also registered in California.,0,6916890.story.

The significant changes in the California vehicle fleet, plus $4 gasoline in 2008 and again in 2011 forcing less driving,  puts California on track to use 3.5% less gasoline in 2011 than in 2002, despite adding 8.3% more driving licenses, according to the LA Times.

The number of electric vehicles in California will soon exceed the number of natural gas vehicles in the USA that stands at 120,000.  Most of the natural gas vehicles, however, are heavy duty trucks and buses that would be using a lot of oil products, while I suspect that the electric vehicles in California are disproportionately passenger cars.  Still today the only natural gas passenger vehicle available for sale in the USA is the Honda Civic.

 The Volt goes on sale shortly in PA.  My sister who lives in Maryland has ordered a Volt that will arrive in 4 weeks and which will be parked in front of her solar powered home.Yesterday I talked with the businessman who is installing 3 public electric charging stations in the Philadelphia suburbs.

The pace of change in transportation is quickening and spreading beyond California.

Pledge Politics: Corbett For Vice President?

Grover Norquist tweeted the love for Governor Corbett: "Pa gov Tom Corbett. Pledge taker and keeper. Possible VP now or prez in 2016,2020."

 Lieutenant Governor Cawley is smiling. Hail to the Chief.

But a lot of Pennsylvanians are griping that Norquist is the Chief.  It also turns out that the Norquist pledge is for life.  No new taxes ever, ever, ever.

Republican House Member Tom Creighton was surprised to learn that he was listed as a Norquist Pledge Taker, and was quoted in an AP story as saying: "Why would I delegate my responsibility to a pledge? It's my job. I'm a no-tax guy, but occasionally, you have to raise taxes.  There are times when taxes are needed."

Blowback against Norquist is growing in Pennsylvania.

Tuesday, October 11, 2011

Cornell Profs Will Debunk Howarth

Professor Howarth has brought considerable attention to Cornell University with his infamously flawed study concluding that "gas is as dirty as coal" on carbon emissions.  No study in the history of Cornell gained more media or public attention.  But some professors at Cornell University felt Howarth's shoddy work that has been debunked by other studies besmirched a great university's reputation.

In a probably unspoken effort to protect Cornell's good name as well as the integrity of science, now more professors at Cornell University are finishing another life-cycle study of the carbon emissions of gas and coal.  The study apparently contradicts Howarth and will soon be published in  a peer reviewed journal.

Perhaps the NYT gas reporter will bother to inform the NYT readers about the Cornell smackdown of Howarth.  I actually highly doubt it, since he did not write one word about the CMU study financed by the Sierra Club or the Worldwatch Institute study, both of which found coal is twice as dirty as gas, after he rushed a major story into the NYT when Howarth's false work was released.

Look no further than the NYT gas reporter's coverage and non-coverage of the gas-coal carbon studies for why good people are dangerously misinformed about critical climate issues.

Monday, October 10, 2011

Weekly Key Facts Roundup--New Series

Each monday, I will be posting key facts from the previous week that shape thinking, policy, and the news. 

With the most recent jobs data released last week, jobs stats are driving markets, economics, and politics. 

1. The nation added a total of 103,000 jobs in September, with private payrolls rising 137,000 but public sector jobs falling 34,000.  The August jobs number was readjusted to 57,000 new jobs, up from the original zero.  At least 125,000 jobs must be created every month simply to keep up with the growing US population.

2. Job creation did not keep pace with US population growth from 2001 to 2007.  Massive job losses took place in the second half of 2008 and did not stop until January, 2010.  From January, 2010 to September 2011, the US has created more total jobs every month, but public sector jobs fell shaply and total jobs created often did not keep up with the number needed to keep pace with population growth.

Occupy Wall Street protests spread across the nation last week.  What is fueling the protests?  Many things, including:

3. Median income for American families fell 7% in real terms since 1999. 

4. Fourteen million Americans are unemployed, with 6.5 million unemployed for more than 6 months.  Approximately 2 million have given up looking for work and are not counted among the officially unemployed.

5. One out of 4 children in the USA live in poverty.

6. The Eagles are 1-4; the Phillies on vacation;  PSU 5-1;  and the Steelers remain Pennsylvania's championship hope.

PA Republicans Promote Drilling Tax Bill On Website

Not everyday can one see the official Pennsylvania House Republican website promote a new tax. Go to

The DiGirolamo-Murt drilling tax bill gets the GOP website love, showing how deep the splits on this issue are within the Republican party and how intense public pressure for a drilling tax has become.

Grover Norquist is not going to be happy and nor will the Commonwealth Foundation, Grover's Pennsylvania ally. 

Better see this material quickly, because it could be gone when the right wing complains to its champion--Mike Turzai.  Or perhaps enough House Republicans want to declare their independence from Grover and his allies that the website will keep up its support for DiGirolamo-Murt, and Representative Turzai will allow a vote on their bill.

Watching the twists and turns on this issue is fascinating.

PA Republicans Split Three Ways On Gas Drilling Tax

The Republican Party completely controls Pennsylvania's government, but public pressure has split it into three camps on the drilling tax issue, making its outcome fluid and uncertain. The Republican splits mean that Democratic votes could be needed to pass any drilling fee or tax bill.

Yet, no vote will occur either in the Senate or the House of Representatives on any drilling fee or tax plan, unless the Republican leaders allow a bill to come to the floor for a vote.  But Republican leaders are under pressure from their own members to resolve this issue and know that the Democratic Party would be delighted if the Republicans take no action or pass a bill that it can attack as a sweetheart deal for the drilling industry.  Democrats believe the public is now intensely focused on this issue, especially in swing districts around the state, and want to run drilling tax campaigns in 2012.

The three-way split of the Republican Party begins with The Norquist Republicans who have signed Grover's no tax increase pledge or support it.  This group rallies behind Governor Corbett's optional, county fee proposal that so far has the support of Grover Norquist.

But the Governor's plan has been praised by few and criticized by many, meaning that the plan will not be passed without changes and probably very substantial ones.   Any changes then may lose Grover's and so presumably the Governor's support, though many Republicans who did not sign Grover's pledge would like to tell Norquist to take a hike out of Pennsylvania's business.

The second Republican grouping includes Senator Scarnati and Representative Quinn who both have offered "statewide fee" proposals and have been judged to be "tax" increases by the grand arbiter Norquist.  Both of these fee plans would impose a mandatory statewide fee, raise much more revenue than the Governor's proposal, and authorize many more statewide uses of the funds raised. 

Representatives Murt and DiGirolamo lead the third Republican grouping and propose a real gas drilling tax, which would raise $300 million now, $500 million soon, and provides for using revenues for local impacts, statewide environmental programs, and other uses like funding drug and alcohol programs.

The Republican statewide fee grouping led by Senator Scarnati and Representative Quinn probably enjoys the most but not universal Republican support.  More than 30 members in the House and Senate have signed the Norquist Pledge and most of them many not vote for anything.

As a consequence of the significant Republican splits on this issue, no gas drilling fee or tax bill is likely to pass without Democratic support.  But Democrats may well not support any bill that the Governor would sign.

Where does that leave the gas drilling tax issue? The issue is stuck between a mobilized public opinion and Governor Corbett's pledge not to raise taxes and fees.

If the Governor will not budge, Republicans can avoid a vote on the issue or unify around a bill that the Governor will sign and pass it without any Democratic support.  Either option makes many Democrats smile by yielding an election issue, since a bill the Governor would sign may raise little revenue and not benefit many parts of Pennsylvania.

If those options are judged to be too toxic, about 50% of Republicans can join with Democrats and pass a bill designed to overcome a veto and remove the issue from politics.

With the Eagles imploding, this will be my fall enterainment.  I am running out to buy more popcorn.

Sunday, October 9, 2011

Republican Drilling Tax Bill Gains Steam

The buzz around Harrisburg is that the drilling tax bill sponsored by Republicans Tom Murt and Gene DiGirolamo had drawn 50 co-sponsors, including 18 House Republicans, by last week.  The number for the bill is House Bill 1863.  In the spring, a similar bill whose chief sponsor was Democrat Greg Vitali attracted more than 70 co-sponsors, but only a handful of Republicans.

Growing Republican support for a drilling tax is an important development.

The Murt and DiGirolamo bill would set drilling tax rates at levels slightly below the current drilling tax in West Virginia.  It would raise more than $300 million at current levels of gas production and more than $500 million in a few years.  Revenues would be used in local areas where drilling occurs, for statewide environmental programs, and other needs such as funding drug and alcohol treatment.

Tom Murt is from Montgomery County and Gene DiGirolamo is from Bucks County.  Support for a gas drilling tax in their area exceeds 70%.  Governor Corbett's drilling fee plan would likely put Murt, DiGirolamo and other Republicans from the eastern third of Pennsylvania on a political hot seat at least and even cause the election defeat of some.

The politics swirling around the gas drilling tax issue will intensify in 2012, now less than 3 months away.

Friday, October 7, 2011

US Carbon Emissions Falling Back To The Future

The USA has rolled back its carbon emissions by 11 years. US carbon emissions peaked in 2007 at 6,022 million metric tons but will likely fall to 2000 or before levels in 2011, according to the most recent EIA data. Based on the first 6 months of this year, total emissions in 2011 will be around 5,600 million metric tons.

Is this decline temporary or a permanent trend toward lower emissions?  Some would insist that the weak economic growth from 2000 to 2007, followed by the sharp fall in GDP from the 4th quarter of 2008 to the end of 2009, and capped off by more weak GDP gains since July 1, 2009 explain the emission reductions. 

While some of the emission decline is a function of slow economic growth, the bottom line is that the US economy in 2011 is bigger than in 2000, and our population has grown by 30 million people as well.  Slow economic growth is still growth.

Rolling the emission clock back 11 years to 2000 levels is more the result of the significant reductions in carbon needed to produce a dollar of GDP.  Increased energy efficiency in electric power, transportation, and all parts of society, increases in production of zero carbon fuels like nuclear, wind, geothermal, and gas substituting  to some degee for coal in power power production mean that both our economy can grow and carbon emissions can fall.

The likely 2011 declines in carbon emissions are similar in both the electric power and transportation sectors, roughly 7% compared to peak emissions in 2007 and both back to 2000 or before levels.

To reach 1990 levels, 2011 emissions would need to fall about another 15%.  Efficiency in using fuel, substituting biofuels, natural gas and electicity for oil in transportation, and more renewables and gas to replace old coal plants could achieve cost effectively such reductions and boost our economy.

Thursday, October 6, 2011

US Energy Consumption Lower Than In 2000

The year 2000, when Vice President Gore battled Governor Bush, before Twitter and Facebook, is a long time ago in a fast moving world.

A near iron rule of energy markets has been that consumption increases steadily, year after year. No more. It's time for a New Rule in the USA.

In 2011, the USA probably will consume about 1% less total energy than in 2000 when America used 98,814 trillion btu, according to EIA data.

Strikingly the era of no growth or falling demand began before the near depression during the end of 2008 and into the first half of 2009. From 2000 to 2007, when the recession began, total US energy demand barely increased, nudging up a bit more than 1%. That is a total of 1%, not a 1% per year growth rate.

Energy consumption did fall sharply in 2009 to 94,475 trillion btu but bounced back to 98,073 trillion btu in 2010. EIA data for the first 6 months of 2011 show consumption is essentially the same as 2010 and less than 2000.

The reasons for no increase in energy demand since 2000 are not the economic collapse in 2008 to 2009. The national GDP has grown every quarter since July 1, 2009 and is bigger than in 2000.

Slow economic growth since 2000 has combined with the mass deployment of much more efficient lighting, appliances, motors, vehicles to keep US energy consumption below 2000 levels. Recent high oil prices have reduced economic growth rates and sent a painful price signal to consumers, thereby boosting again the momentum to use energy efficiently, and putting downward pressure on consumption.

The new rule for energy markets during the next decade in the USA may become flat consumption or even slightly declining sales.

Wednesday, October 5, 2011

Southern Company CEO Slams Gas

Thomas Fanning is less well known than Josh Fox, despite heading the largest by some measures electric utility in the USA, the Southern Company. Fanning and Fox both don't much like gas, though Josh is opposed to using all fossil fuels and that would include the large amounts of coal that Southern Company burns in some plants with poor pollution controls.

Despite operating some of the biggest, dirtiest coal fired power plants that emit pollution that can sicken and kill many, Fanning thinks environmental concerns about shale gas could stall gas production. Fanning is also aggressively lobbying to delay the proposed EPA Air Toxic Rule and other EPA rules that require a clean up of his dirty plants and would save up to 34,000 lives.

Fanning knows that natural gas plants meet the EPA rules and are much cleaner than his coal units, but anything goes in the world of lobbying and spin.

Fanning also warns about the USA increasing the use of natural gas for electricity from its current 25% level, while coal provides 43%. He worries about gas price shocks ahead and suggests insufficient pipeline capacity will prevent gas from reaching markets.

Fanning made his views known in an interview in the Financial Times. Fortunately Fanning does not speak for the entire electricity industry. Indeed Exelon and Calpine are just two major power producers that are defending the EPA Proposed Air Toxic Rule.

In the face of attacks like those launched by Mr. Fanning and others in some coal companies, the near total silence from the gas industry about the proposed EPA Air Toxic Rule remains bewildering.

Cain Has Heart Surging Past "Heartless" Perry

Telling 90% of Republican primary voters that they are heartless may be the most effective way in political history to lose the Presidential nomination with just one word.

Yet, wow, wow, and wow once more is my reaction to the rise of Herman Cain to the top of the Republican Presidential field. The latest CBS News poll at confirms other polling in the last 5 days that has Cain surging to a tie with Romney at 17% each and Perry plummeting to 12%.

Cain's rise is a product of Perry losing 50% of his support, and Romney unable to secure more than 25%. While Romney is not growing support, he seems just barely to be holding his supporters so that stability might be a success in a campaign marked by meteoric rises and precipitous falls.

Perry has been at least temporarily undone by his immigration position and specifically his support for in-state tuition rates for undocumented students. Then he made matters worse in a debate by declaring those who disagree with him to be "heartless." It turns out he just told 90% of Republican primary voters that they lacked a heart, since polling finds only 10% support Perry's tuition position.

Republicans are used to hearing such attacks on them from Democrats but found Perry's Texas talk to be doubly insulting, since Perry is on their team and wants to lead it.

Perry had other awful debate moments, reminding viewers that his college professors might have been grade inflating when they gave him a bunch of Ds. Just proves anyone can be elected Governor of Texas and just possibly President.

My gut tells me that Perry is grievously wounded but not yet mortally. Despite his immigration apostasy, Perry still has an incredibly conservative record and the much overstated "Texas Miracle" in which lots of Republicans believe.

What about Cain's ascent? Is it sustainable? Could Santorum or Gingrich be the next to shoot to the top?

Cain has about 4 weeks to consolidate conservative support. If he does not, Perry could regain political health or Santorum or Gingrich could be the next to audition for the anybody but Romney starring role. Rush Limbaugh and conservative grassroots are not going to support Romney, but it remains uncertain whether they will consolidate behind any of the alternatives.

I am going to buy more popcorn.

NGV's Growing Rapidly In World But Slowly In USA

Natural gas vehicles numbered 13.9 million vehicles globally in 2010, up substantially from 2.8 million in 2003. Since 2000 the global growth rate for NGVs has been 26 per cent per year. About 1 per cent of all vehicles on planet earth now run on natural gas and most of them are light duty or cars.

In the USA just 120,000 natural gas vehicles are operating on gas or about 1 out of every 10,000. Here most vehicles running on natural gas are heavy duty vehicles or trucks and buses. As a result, about 0.2% of the fuel used in America for transportation is gas. In 2010 45 billion cubic feet of natural gas was used to power vehicles on our roads.

While the USA has a slow growth rate in natural gas vehicles, the growth rate in gas for transportation has been 25%, as niche markets like transit buses, refuse trucks, and taxi fleets show major growth. The vehicles in the USA that are running on gas are big and use a lot of fuel-- typically the equivalent of 5,000 to 15,000 gallons per year.

Notable successes include the Los Angeles transit system recently retiring its last diesel bus. The California Air Resources Board calculates that a natural gas vehicle emits 22% to 29% less carbon than vehicles running on diesel and gasoline respectively.

Just two ways exist for cutting the major carbon emissions from transportation: fuel efficiency and switching to lower carbon fuels than gasoline and diesel.

Tuesday, October 4, 2011

Really Good Economic News...No Joking

If you are like me, you find today's economic news is like a Stephen King horror novel. The possible breakup of the Euro, deflationary forces growing and being made worse by the worst possible timing for the implementation of austerity economics, and Chinese real estate bubbling with a burst inevitable add up to real risk of depression.

No surprise that in reaction global oil prices have fallen and the US stock market has lost 17 percent since April, when it reached its high since the last time the world stood at the edge of economic collapse in the 4th quarter of 2008 and the first quarter of 2009.

All this gloom made me ready for some football but both the Eagles and Steelers lost. I am so ready for any good economic news.

In an effort to lift rationally spirits, I highlight the September car sales. They were up 10% from one year ago, reaching a relatively healthy annualized rate of 13.1 million. General Motors and Chrysler sales were up 20% and Ford's nearly 9%.

Car sales matter a lot, because they account for 20% of consumer spending, and about 14% of total demand. The US economy will not return to health without if the auto and housing industries are flat on their back. At least auto is showing real signs of recovery.

What's driving the increase of auto sales? Good products and prices but also necessity. The average vehicle on the road is 10.7 years and is just plain wearing out.

PA Marcellus Drilling in 33 Counties: What Are Water Impacts?

The infant Pennsylvania shale gas industry of 2005 is six years later at least an eighteen-year old. 

Pennsylvania now has issued more than 8,000 Marcellus well permits.  

According to, about 5,000 of the permitted Marcellus wells are in 6 counties-- Bradford, Tioga, Washington, Susquehanna, Greene, and Fayette, listing them 1 through 6.   Bradford has the most with close to 1800 permitted Marcellus wells.

While the permitting and drilling is concentrated in 6 counties, as many as 33 out of a total of 67 counties in Pennsylvania have had at least 1 Marcellus well drilled.

The industry is producing around 3.5 billion cubic feet per day or 6% of America's daily gas, that is indeed a lot of gas, the mighty Marcellus flexing its muscle.

What has been the impact on water as a result of this development?  Thanks to much tougher waste water disposal rules and innovations by the industry that include recycling of
water and treatment of drilling waste water that can turn drilling water into distilled water, gas drilling's impacts on water have been modest and are likely declining further. 

In fact, less drilling wastewater apparently is being discharged without full treatment to rivers and streams than prior to the first Marcellus well drilled in 2005.

The most serious water impacts have been to less than 100 water wells that have been contaminated with methane that migrated to them as a result of gas drilling mistakes.  Gas migration is the primary impact on water, and resolving this issue remains a major piece
of undone business.

But gas drilling has not contaminated any public water drinking system so the system of regulation has worked so far to protect the overwhelming majority of waters and drinking water customers in Pennsylvania.

There have been some spills and leaks that reached streams.  A few small fish kills did result, but the Dunkard Creek environmental disaster was caused by a coal mining discharge that created aquatic conditions favorable to an invasive algae.

In all cases the gas spills and leaks were addressed quickly. Damage done was limited and temporary, though not zero.

Gas drilling has done nothing like the damage caused by past oil  spills or leaks to the Delaware River, Yellowstone River, or in Michigan or the coal ash spill into the Delaware

Raw sewage spilling into streams, mining discharges that decimate thousands of miles of water, nitrogen, phosphorous, and sediment running off agricultural and urban lands, antibiotics in water, septic systems malfunctioning, and other daily assaults on our water quality create significantly more damage than drilling does. But they draw mainly yawns, while the near frenzied focus on drilling diverts nearly all attention.

With gas drilling water issues being better managed, attention should focus on the main threats to water and appropriately turn to air impacts from gas drilling to make sure that gas remains a solution to Pennsylvania's problems with smog, soot, and mercury in the air. The gas drilling air issues are not resolved. A focal point now becomes the EPA proposed July 28th air rules for gas drilling.

Counting Votes: A Political Analysis of The Governor's Fee Proposal

The key numbers in the gas drilling tax or fee debate are not the tax rate or fee per well or the total revenue raised. Instead the key numbers are 102-26-1 or 136-34.

While those numbers look like winning lottery tickets, they are the number of votes a bill needs to become law either with the signature of the Governor or by overriding a veto.

The normal route to pass a bill is 102 votes in the House of Representatives; 26 in the Senate; and the signature or lack of a veto by the Governor. In the event of a veto, the Legislature can override it by a vote of 136 and 34 in the House and Senate, a high mountain for sure but a mountain that exists and has been climbed in the past.

For the Governor's impact fee proposal, the first question becomes can it pass with only Republican votes? It will have to, because Democrats in the House and Senate have major reasons to vote against it almost unanimously.

Most Democrats represent districts that would get almost nothing from the Governor's proposal and know that any vote for a fee or tax can and will be used against them in a future campaign by a Republican opponent. There is no upside and lots of downside for Democrats in the Governor's proposal.

The Governor will need to gain the support of at least 10 of 14 Republican senators who represent districts that will get little or nothing from his proposal and at least 10 Republicans in the House that get little or nothing. For this group of Republicans, support of the Governor's fee proposal creates a potent political issue for Democratic opponents in 2012 and 2014 election cycles. The issue could even cost Republicans 5 seats and majority control of the Senate. For that reason alone, the Governor's proposal is not likely to pass the Senate.

The path in the House for the Governor is made trickier, because as many as 25 Republican House members have taken a Tea Party plegde to oppose all fees and taxes. These members know that they may face a primary challenge if they break it.

The easiest way to get to 102 and 26 would be a bill that benefits all districts and Pennsylvanians. In fact there are probably 140 votes in the House and 40 in the Senate for such legislative proposals. But the Governor has suggested he would veto any bill that delivered funds in a manner that breaks a link between revenues raised and impacts.

The two political keys, therefore, to this issue become, will the Governor show flexibility on the use of funds so that all Pennsylvanians benefit and a bill passes that he supports? If not, will the 70 per cent support for a drilling tax in the public produce enough votes to override a possible veto?

Monday, October 3, 2011

Exelon Buys 230 Megawatt Solar Plant

The nation's largest nuclear power generator that owns the PECO electricity utility just bought a 230 megawatt solar plant that is being built in California. The seller?

First Solar, America's largest solar manufacturer and a major solar developer.

The plant will start operating in 2012, reach full operations in 2013, and provide enough power for 75,000 homes. Pacific Gas & Electric will buy all the power from the facility for 25 years.

Exelon last year bought significant wind generating capacity and now owns a huge solar plant. What is next? The world is changing rapidly.

A Green Bashes Wind Power: Facing Honestly Gas and Our Energy Choices

The intense focus on gas drilling would provide a huge public service if it both minimizes the impacts of gas drilling and leads to a broader discussion about our real energy choices. 

On September 28th, the NYT  ran an op-ed by a Vermont environmentalist attacking a wind farm that is being built on a famous Green Mountain.  See

"Bulldozers arrived a couple weeks ago at the base of the nearby Lowell Mountains and began clawing their way through the forest to the ridgeline, where Green Mountain Power plans to erect 21 wind turbines, each rising to 459 feet from the ground to the tip of the blades.  This desecration, in the name of  'green energy' is taking place in Vermont's Northeast Kingdom..."

Similar language has been used to attack the 16 operating wind farms in Pennsylvania, with another 8 in construction and development. While no one of Pennsylvania's wind farms is more than a small step forward, cumulatively Pennsylvania's wind farms will soon provide enough power for 400,000 homes. 

As with wind, some want to stop or ban hydraulic fracturing and shale gas for its impacts and flaws.  Gas has impacts and is not 100% clean, though it emits zero mercury, lead, arsenic, soot, and just 50% of the carbon pollution coal does on a lifecycle basis (see the Carnegie Mellon University, WorldWatch Institute, and NETL studies all finding that gas is much clearner than coal).

As in the broadside in the NYT, wind energy is often attacked at the local level by people who love nature and their home areas. I respect their desire to place their back
yard above all else, for if you do not love your home, what do you?   Robert Kennedy whose family has a famous love affair with Cape Cod is leading the assault against the Cape Cod wind farm.   Intense attacks in Maryland delayed for many years wind energy there.

Despite my respect for what motivates the criticism of wind projects, I buy 100% wind energy for my electric power at home and normally do not want anti-wind campaigns to prevail, because the alternatives to wind are so much worse for our economy as well as our national and global environment. The attacks on wind energy always make similar points: it is intermittent; any one wind farm does not prevent much pollution so why do the one wind farm; it damages land; it is ugly.  Sometimes it is argued that wind is more expensive than alternatives. 

Renewables--corn ethanol, large hydro, wind, solar, wood combustion--cumulatively provide about 10% of the total energy America consumes so doubling them to 20% in the next 10 years
would mean that 80% of our energy must come from other resources.  To the Vermont environmentalist, perhaps that means the damage done to the land that will occur by doubling renewables is not worth the benefits of having done so. 

Doubling renewables will not fix our climate problem or even end smog, soot, toxic air pollution.  To me that is not a persuasive reason to stop the next wind farm that is one small step to doubling and then tripling renewable energy .  Moving to renewable energy is a long journey that will take a great many small steps.

Yet, the rational criticisms of wind or corn ethanol or large hydro or wood combustion have degrees of merit, as do responsible criticisms of gas drilling.  Indeed recently, though gas emits 50% less carbon on a lifecycle basis than coal, gas was attacked by some environmentalists, because substituting one-half of global coal-fired power plants with gas would only produce a modest lessening in global temperature increases over the next 90 years.  The Wigley study modeled all the soot that
substituting gas for coal would remove from the air, and noted that getting rid of the soot would remove a cooling forcing, thereby raising temperatures temporarily.  The same would be true, of course, if renewables replaced one-half of global coal.

And what would would the alternatives to gas and now wind be were they banned?  Remember that gas supplies 25% of all our energy and shale gas in turn 30% of all our natural gas, heating homes, running factories, and providing electricity.

Coal could indeed replace a lot of gas relatively quickly. Robert Kennedy has been outspoken attacking (correctly in my view) mountain top mining that has blown up 500 mountains in Appalachia and buried 1200 miles of streams.  What about the 34,000 people who the EPA says die each year from pollution mainly from the one-third of coal fired power plants without pollution controls? Do we want to double heat trapping carbon emissions by replacing gas with coal? There is no real argument that using more coal and less gas would be an enormous environmental step back

Nuclear? Six nuclear reactors out of 450 around the world have melted down.  I live in the Three Mile Island evacuation area where one melted down in 1979, though the US nuclear industry has had a strong safety record for the last 32 years.

 Beyond the safety issues, new nuclear has massively high costs, especially when the waste disposal and decommissioning costs are not subsidized by national governments.  New nuclear makes wind look cheap. Moreover building a new nuclear plant takes at least 10 years so it cannot replace gas quickly.

Oil? The new boom in oil drilling in the USA could mean with other steps like efficiency, biofuels, natural gas and electricity vehicles the USA could end oil imports by 2025.  But there is no way to replace the 25% of energy coming from gas without massively increasing oil imports.  Do we want to become more dependent on oil at a time when China and India are raising rapidly their oil consumption and imports?.

And what about the enormours daily impact of spills, leaks, carbon emissions, and other air pollution from our reliance on oil?  The environmental impacts of oil dwarf those of natural gas.

But if not coal, oil, nuclear, wind, what about solar?  Its costs are plummeting and are likely to reach the cost of grid power by 2015.  But it now supplies 0.2% of our electricity and will remain substantially intermittent in most areas, until major breakthroughs in energy storage take place. 

And solar too has been attacked for impacts on land and wildlife in California and other states by those who love those backyards.

Coal, Oil, Nuclear, Gas, Wind, Solar all have impacts on the environment, but they are not the same by any means.  The fuels are also in competition with each other, and which fuels win more market share and how quickly those market transformations take place shapes our environment for good or ill. 

For the environment, gas displacing coal and oil represents a major improvent for air, land, and water.  And for the environment, more wind in Vermont, Pennsylvania, Maryland and solar in California is vital, despite their own inevitable impacts on land and views.

Coming to grips with our energy choices--and the critical role of energy efficiency--and their relationships to each other may be a result of the intense focus today on gas drilling.  That would be a good thing, indeed.

Renewables To Exceed Nuclear Power in 2011

Energy history is being made in 2011. Renewable energy will provide more power than nuclear energy for the first time since 1990, when the rise of nuclear power over 50 years reached the point where it surpassed hydro and other forms of renwable energy in total energy production. 

Rnewable energy has been rising rapidly for the last 10 years and it will surpass once again nuclear power as a larger energy source for America. In the first 6 months of 2011, renewable energy provided more energy than nuclear power for America, according to the Energy Information Administration's data at

And renewables will almost certainly be more important than nuclear power to powering America for the full 2011.

Most of the 2011 growth in renewables comes from wind generation, increasing corn or biomass to make transportation fuel, and a lot of rain in the Pacific Northwest in the first 6 months of this year that boosted hydro production.  The wind and ethanol increased production will increase further over the next 18 months, but hydro production will likely fall next year if precipitation is less heavy.  That means the race between renewables and nuclear power will be close in 2012.

Together both renewables and nuclear account for a bit more than 22% of domestic US energy production.  The remainder of US energy production comes from coal, oil, and natural gas.

Saturday, October 1, 2011

Stunning Fact: 10 Million Americans Receive Royalty Check

The oil and gas boom in the USA caused the price of natural gas to fall and stay low, ended a 35-year long slide in domestic oil production, helped to cut oil imports 20%, and delivered oil and gas royalty checks to 10 million Americans for production from their land.

That would be about 3% of all Americans.  Stunning.