Thursday, May 31, 2012

Weston Solutions & Chesapeake Release Bradford County Test Results For Split Samples Of EPA Fracking Study

On behalf of Chesapeake Energy, Weston Solutions ran tests on split water samples at 14 water wells and 1 spring, where EPA is also testing water in Bradford County, as part of its Congressionally mandated hydraulic fracturing study.  The results are released in the following massive, 360-page document:

Weston states in the executive summary that the testing found no contamination due to gas drilling. Methane, chloride, sodium, barium were among the contaminants for which testing was run. I have not yet done a full review of the document and would be interested in any observations others may have.

Falling Oil Hits $87.60 and Obama Haters & Oil Company Conspiracy Theorists

Yesterday brought another big drop in oil prices, with oil for July delivery closing at $87.60.  Sharply falling oil prices are bringing relief to consumers and should do one more good thing on their way down: destroy the credibility of those who variously said President Obama or an oil company conspiracy caused rising prices.

Oil is down $22 a barrel from its 2012 peak, and the price drop is showing up at the pump. I paid yesterday $3.42 a gallon in the Hershey, Pennsylvania area, or 54 cents lower than the painful peak $3.96, at the same station, about 8 weeks ago.  I expect to see another approximately 15 cents decline in the next 3 weeks where I gas up.

The cause of the recent price declines is largely softening demand and a growing belief that the European economy (one-third of glogal GDP) may be in early stages of depression.  As a result, some of the best macro-economists and monetary experts in the world have concluded that the Euro is doomed--going much beyond a simple Greek exit--and that its demise will not be orderly. 

More are concluding that Germany simply won't be able to shake the ghosts of the hyper-inflation of the Weimar Republic to take the necessary steps to end the run on the Euro and banks across Europe.  The result will be a deepening economic contraction that could lead to 20% unemployment across Europe and much less oil demand.  The oil markets may be signaling that the risks are rising of this dire view becoming reality.

Yet, the geopolitical pressures on oil include supply.  And this week the news was bad from the international effort to make Iran credibly give up its efforts to build nuclear weapons.  This may end a period when cooler voices were dominating this issue and cooling oil nerves.

Through all the pressures, the oil price remains a result of world pricing that reflects ultimately the fundamentals of global oil supply and demand.  Enjoy the falling prices, while they last.  But remember the last time oil  was really cheap was in December 2008, as the world stood at the precipice of a global depression, with economies sharply contracting around the world.

Stunning Facts: 2 Million Hybrids & Nearly 50,000 EVs On Roads

Clean Edge is out with its Third Annual State Clean Energy Index.  Among its many interesting findings are that America has 2 million hybrids and nearly 50,000 all electric vehicles on its roads.
The age of the hybrid began 15 years ago, when Toyota produced the Prius but initially sold it only in Japan.

So what are the 10 leading Clean Energy states? California, Oregon, Massachusetts, Washington, Colorado, Illinois, New York, New Mexico, Vermont, and Minnesota.

Wednesday, May 30, 2012

Global Prius Sales Explode: Number 3 Selling Car In World

Subject to ridicule in some quarters, the Prius and its hybrid engine is having the last laugh on its way to becoming Toyota's most important vehicle ever produced.

Toyota knew that 2012 would be a big year for the company, after a horrendous stretch, made even worse by the 2011 Japanese earthquake and tsunami that devastated production.

The heart of Toyota's hopes for 2012 was an expansion of the Hybrid Prius line by introducing new Prius models.  The first quarter 2012  auto sales figures confirm Toyota's hopes for hybrid technology and the Prius line, with sales significantly exceeding its best case forecasts, rising 125% globally.

Indeed, the Prius line now ranks as the third best selling car in the world at 247,230 vehicles, and the new Prius C is the leading car sold in Japan.  Only the Toyota Corolla with sales a bit over 300,000 and the Ford Focus sold more than the Prius line.

Led by the Prius, rising fuel efficiency in the USA is a major reason why oil consumption in the USA is back to 1999 levels.

The Economist Writes About "Fracking Good News" Or America's Slashed Carbon Emissions

More and more influential journals and organizations are noticing that shale gas has caused US carbon emissions to fall substantially.  Last week it was the International Energy Agency, estimating US emissions had fallen 450 million tons or 1.5 times all the emissions from Pennsylvania and about 1.5% of world emissions.  All largely because shale gas crashed the price of gas and made it competitive with coal.

Yesterday, in its "Fracking Good News" article, the Economist magazine takes note of the cheaper energy and lower emissions made possible by shale gas.  See

The Economist notes that, while carbon emissions are falling in the US, coal is enjoying growth in Europe. Why? Unlike in the USA, European natural gas is expensive, and coal is much cheaper than gas. The Economist even states that emissions may begin rising in Europe as a result.

That would be truly extraordinary, since Europe is in a depression or recession, with massive economic contraction in large sections of it, and a rising risk that the Euro itself could dissolve.

Meanwhile in the USA, the economy has been growing since July 1, 2009, millions of jobs have been created, and unemployment has been falling. Moreover, US energy related carbon emissions will fall another 150 million tons in 2012.  Again thanks primarily to shale gas making natural gas cost competitive with coal in the USA.

Much is different across the Atlantic.  The Economist story is well worth reading.

IEA Golden Rules Say Fracking Can & Must Be Safe Or Else!

Avoiding diplomatic or central banker obfuscation, when it released yesterday in London and Washington DC its anticipated shale gas report, the International Energy Agency did not mince words:

"The technology and the know-how already exist for unconventional gas to be produced in an environmentally acceptable way," stated the IEA Executive Director Maria van der Hoeven, in the press release accompanying the report.

Ms. van der Hoeven, however, continued: "But if the social and environmental impacts are not addressed properly, there is a very real possibility that public opposition to drilling for shale gas and other types of unconventional gas will halt unconventional gas revolution in its tracks. The industry must win public confidence by demonstrating exemplary performance; governments must ensure that appropriate policies and regulatory regimes are in place."

The full report entitled,"Golden Rules for a Golden Age of Gas," is available here:  I was one of the many reviewers of the 143 page report and did participate in an IEA workshop to develop its content. The document has 3 parts: Addressing environmental risks; The Golden Rules Case and its counterpart; and Country and regional outlooks.

At an estimated increase cost of 7% on an $8 million (pages 55-56) well, the IEA proposes 22 Golden Rules (see pages 13-14 and again at pages 42-48)) to address environmental and social risks. These rules would address successfully the potential for air and groundwater pollution.  The IEA especially highlights in several parts of the report the need minimizing greenhouse gas emissions " the point of production and throughout the entire natural gas supply chain."

The IEA further finds that the technology exists to address all environmental issues "...but a continuous drive from governments and industry to improve performance is required if public confidence is to be maintained or earned."

The Country and regional outlook section starts with the USA and also includes discussion of Canada, Mexico, China, Europe, and Australia.  The IEA notes that, during 2010, the USA accounted for 76% of global unconventional gas production; Canada 13%; and the small remainder in Australia and China from mainly coalbed methane wells.  The IEA states that China had drilled just 20 shale gas wells as of early 2012.

Actual unconventional gas production remains largely a North American reality, though massive amounts of unconventional gas reserves are found in many parts of the world.

Beyond the 22 Golden Rules to address environmental risks, most of the IEA report is a modeling exercise of 2 cases, with differing assumptions.  While the modeling is fun for policy wonks, it is necessarily speculative and of limited utility.

Just how limited the utility of this kind of work is driven home by similar EIA forecasting of how much energy will come from various resources over the next 20 years.  Very recently, EIA was predicting that coal's market share in the US would not fall to 39% until 2030.  In fact, markets move so rapidly and sharply that coal's share will fall below 39% this year.

With that said, in the high unconventional gas production case, IEA findings include 1 million gas wells will be needed through 2035; gas will overtake coal as the world's number 2 fuel but still be behind oil; and natural gas prices will be lower than otherwise expected. 

In the low unconventional gas production case, coal remains the number 2 fuel in the world, and gas grows little, gas prices are higher, and carbon emissions are a marginally higher.

The IEA modeling assumptions may not account for the large, recent decline in US carbon emissions due to gas substituting for coal.  US energy related emissions, as of 2011, declined by 450 million tons, an amount equal to about 1.5% of total world emissions, and largely because of the shale gas boom. US emissions will fall another approximately 150 million tons in 2012, bringing the total decline to an impressive $600 million tons or nearly 2% of world emissions.

Indeed, in the here and now of the real world, US emission decline due to shale gas is about the only climate change bright spot in the entire world. Yet, shale gas is vilified by some who profess to be most concerned about climate change.

While natural gas and indeed no one answer can stabilize climate pollution concentrations, its vilification is perverse, given the big, immediate cuts in US emissions it has already delivered.

The IEA notes that, in both of its forecasting cases, carbon emissions and temperatures grow substantially and calls again for carbon capture and sequestration technology development.

The part of this report that is likely to have the most lasting impact is its discussion of environmental risks and existing technology and its 22 Golden Rules of Gas.  Excellent operators would be thoroughly utilizing them today. And the IEA is clear that the future of unconventional gas has a lot to do with excellent operations becoming the norm.

Tuesday, May 29, 2012

The 50th Anniversary of the Centralia Coal Fire Remind That Up To 200 Burn In US

Many good people mistakenly believe that shale gas is uniquely and acutely threatening to the environment, even though it has never been responsible for anything like the Centralia, Pennsylvania fire.

On May 27, 1962, as the town prepared for Memorial Day, the coal under Centralia ignited. Fifty years later, Centralia's population, once 1,400, is down to 5. The fire continues to burn. 

The Washington Post wrote a piece, marking the 50th anniversary of the nation's most famous coal fire.

But Centralia is far from unique.  Up to 200 coal fires are burning in as many as 21 states.

Around the world, thousands of coal fires are burning now, with an incredible 1,300 estimated in Indonesia alone.  Mercury emissions from the global coal fires are estimated at 48 tons or about equal to all the mercury emitted in the USA in a year from all sources.

In the USA, about $1 billion has been spent trying to fight coal fires and nearly all of that in Pennsylvania and West Virginia.

Natural gas is cleaner burning and causes less damage than many alternatives, and certainly less than coal and oil that together supply about 54% of our total energy.  Using more gas, in fact, is cutting pollution in the USA by large amounts, since it is displacing more polluting, competing fuels. Natural gas also could be cutting emissions around the world, but the war on hydraulic fracturing delays the use of gas, insuring more coal and oil usage and the associated impacts. 

The 50th anniversary of Centralia fire should remind all of these truths.

55 Big Investors Challenge Shale Gas Industry & Will Compare Environmental Performance of Companies

Intense regulatory and media focus on shale gas production is being joined by investor pressure to improve environmental performance of the industry and individual companies.  Not everyday do 55 investors, with one trillion dollars under management, band together to push operational goals for an industry and say they will be comparing companies by their environmental risk levels. Yet, that is what happened last week.

Led by Boston Common Asset Management, Investor Environmental Health Network, and Interfaith Center on Corporate Responsibility, 55 investors issued 12 goals designed to insure that shale gas production's risks and impacts are minimized.  The 12 goals cover air emissions, water handling, gas well construction, and more. 

Entitled "Extracting The Facts: An Investor Guide To Disclosing Risks From Hydraulic Fracturing Operations," the full report can be seen at: Each goal comes with a description of general best practices and possible metrics for measurement of performance.

Investors are seeking information to guide investments, to decide where to place capital and where not to do so. The report states at page 3 of the Executive Summary: "Investors require relevant, reliable, and comparable information about companies' natural gas operations to make investment judgments based on a robust assessment of companies' environmental, social, and governance policies, practices and performance."

The key word in the foregoing is "comparable."  These investors are seeking to differentiate between companies and put pressure on the whole industry to lower environmental risks.   These 55 investors argue that lowering environmental risks and differentiating companies has growing importance as a result of moratoria in New York, the Delaware River Basin, France, South Africa, parts of Canada, and Bulgaria.

Steve Heim of Boston Common Asset Management reported in December 2011 that 21 shareholder resolutions about shale gas production had been filed at 16 companies and often had drawn substantial shareholder support.  Last week's announcement that 55 investors have banded together indicates investor interest and concern still grows about the operating practices of the industry and companies.

Informed investor focus on the environmental performance of gas production is a good thing, as investors have a unique role and real leverage in a market economy. Hopefully, investors, however, will focus as intensely as they do in "Extracting The Facts" on lowering the environmental risks of all energy sources, including those with more risk and impacts than shale gas production.

Indeed, it must not be forgotten that the increased use of gas made possible by shale gas production in the USA has slashed carbon emissions (as well as other pollutants), according to the International Energy Agency and my own work.  More attention to lessening methane leakage and other environmental impacts in gas production, as the 55 investors seek, will increase still further the environmental benefits of natural gas.  That is something that everyone should welcome.

The Power Of Markets: $2.75/mcf Is Key Price For Switching Between Gas & Coal

"The higher the gas prices try to move, the less attractive coal-to-gas switching becomes," said Stephen Schork, a noted energy analyst, in the Wall Street Journal on Saturday, May 26th.  Natural gas prices fell nearly 8 cents or 3% on Friday, settling at $2.56 for June delivery.  Prices were down 6.4% for the week.

Aside from weather, demand from electric power plants is the key factor currently impacting natural gas prices.  But the total demand from electricity generation for natural gas is determined by the comparative pricing of coal and natural gas.  Indeed, significant amounts of electric generation demand in the USA can be met by either gas or coal plants, creating intense, almost daily price competition between the fuels, as many hours in the year total electric demand can be met by a fraction of the total available electric supply. 

At dual-fuel plants, fuel-price alone determines whether coal or gas is the winner.

Observable since 1990, the trend toward more natural gas and less coal usage, however, became a stampede, when huge shale gas production pushed in 2011-2012 natural gas prices below $3, and then $2, for a thousand cubic feet.

At those prices making electricity was cheaper with gas than coal.  The result was that the electricity generation market share of coal collapsed again, dropping a full 6 percentage points, from 42% in most of 2011 to 36% in the first quarter of 2012.

In significant part, because so many plants began to use natural gas in the 4th quarter of 2011 and the first quarter of 2102, natural gas prices bottomed this April, bouncing off the $1.80 level, rising more than 70 cents per thousand cubic feet in the last 4 weeks or so.

Yet, last week prices ran into a "coal price cap."

As coal demand decreased substantially in the last 6 to 12 months, coal prices fell, making coal more competitive. Last week, the natural gas market signaled that gas would lose significant demand to coal, if gas prices hit $2.75 per thousand cubic feet.  The $2.75 price point is approximately where natural gas starts to lose market share to coal, given current supply and demand market conditions for electricity, natural gas, and coal.

How much of the electricity generation market can switch back and forth between coal and gas?  A lot.

The last 6 months indicate that about 6 percentage points of the national electricity market can move back and forth quickly between coal and gas, depending on the price of each.  Those 6 percentage points are more than the total electricity provided by all wind and solar generation in the USA. Again, it is a lot of power, switching between gas and coal.

Banning hydraulic fracturing, as Vermont has done (though it continues to import and use gas), would move massive amounts of electricty demand--much more than the 6 percentage points of total market share that is almost daily contestable--from gas to coal and quickly.  In the real world of energy markets, the choice is often between coal or gas.  Refusing to face that fact does not make it any less real.

Monday, May 28, 2012

Facts For Memorial Day: To Remember And Honor

Since the American Revolutionary War from 1775-1783, Americans have died to found this nation and keep it free.  Total war US war deaths are 1,343,812.  Wikipedia lists 73 wars or military conflicts in which Americans died serving the nation.  Memorial Day is one, special day to remember them and their sacrifice.

While most Americans today live at peace, the nation remains at war, with the huge burdens of war placed narrowly on those who serve in our military and their families.  Multiple, repeated combat tours are a fact of life for our men and women in uniform.

Indeed, the war in Afghanistan continues into its 11th year, while the Iraq war ended in 2011, after more than 8 years.  Wikipedia ranks the combined Iraq and Afghanistan wars 7th in total US combat deaths and 9th in war deaths. 

The combined Iraq-Afghanistan US war deaths are at least 6,280.  Today, a solemn day, we remember them and all our war dead.

Friday, May 25, 2012

Goldman To Invest $40 Billion in Renewables: Another Fact Showing Shale Gas Won't Kill Renewables

A common justification provided by some environmentalists for supporting a ban of hydraulic fracturing is that cheap gas would supposedly kill renewable energy.

One empirical problem with the view that gas dooms renewable energy is that renewable energy and gas have been both booming since 2008, for both different and similar reasons.  Another factual problem with this argument is that already global investment in renewable energy power plants exceeds investment in fossil fuel plants, according to Bloomberg Finance and others.

Demonstrating that trend and why renewable energy will continue to boom, as gas booms too, Goldman Sachs announced at yesterday's annual meeting that it would invest $40 billion in renewable energy projects over the next 10 years.,0,6788193.story.

For good measure, Goldman also states it will reduce its net carbon emissions to zero.

Renewable energy continues to grow cheaper, with solar about the only energy source falling as much as US gas since 2008.  Wind can produced at 5 cents per kilowatt-hour. Hydro can be economically attractive, as can capturing methane from various sources.

Another reason why gas and renewables will continue to boom is that both have environmental and development advantages over the alternative sources of energy.

As usual, Goldman is following these powerful trends to profit.

IEA Says Shale Gas Helps US To Slash Carbon Emissions More Than Any Other Country

Shale production is a key factor allowing Uncle Sam to help solve climate change, and the world is noticing.

While the world hurtles to record levels of carbon emissions, rising another 3.2% globally in 2011, the International Energy Agency (IEA) says that carbon emissions fell more in the US than any other nation in the world during the last 5 years. Why? Shale gas was the key factor, according to the IEA.

The Financial Times reported yesterday that Fatih Birol, the Chief Economist of the IEA, says:  "The replacement of coal by shale gas is a key factor and what happened in the U.S. could very well happen in China and other countries and could definitely help in reducing co2 emissions."  Mr. Birol went on to say that shale gas in the US was a "success story."  The FT story is rocketing around the world.

The IEA states that the US reduced energy related carbon emissions by 450 millon tons over the last 5 years. The 450 million tons is equal to about 1.4% of global emissions in 2011 and equal to 150% of all of Pennsylvania's emissions.

Moreover the IEA number is conservative, since it does not include a likely further 2.9%, or approximately 150 million ton, 2012 reduction projected by the EIA. By the end of this year, the US reduction should equal about 600 million tons or about 2% of global emissions.  It is a big deal that everyone should be celebrating but expect silence from too many environmental quarters.  This truth is extremely inconvenient to some.

The IEA reduction number also does not include the 600 million tons of new emissions that the Sierra Club calculates were avoided by the cancellation of proposed new coal fired power plants, when the price of gas collapsed.

While US emissions are plunging due to mainly shale gas, with assists from efficiency in transportation and renewable energy, China's emissions rose 9.3% in 2011 mainly due to greater use of coal.  World emissions reached 31.6 billion tons, putting the world on track toward a 6 degree Celsius increase by 2050. 

The assault on shale gas has done immense damage to the climate and removing other pollutants, as it is delaying an economical and immediate means of slashing emissions. 

Sometimes the world is really bizarre. Former Vice President Gore tweets his support for banning hydraulic fracturing, a policy that would reverse the carbon progress the USA is making, while some ardent supporters of shale gas deny the reality of climate change, even though shale gas is slashing US carbon emissions.

Perhaps the IEA finding that the US has reduced carbon emissions more than any nation in the world during the last 5 years, in substantial part due to shale gas, will allow more environmentalists to speak up about the truth of America's energy choices. 

Or will the fact that shale gas is slashing US carbon emissions remain a truth that many environmentalists dare not say?

Thursday, May 24, 2012

Great Fact: California Condors Escape Extinction (In Age Of Wind)

The hand of man pushed the California Condors to the brink of extinction.  Just 23 individuals were left in the wild by 1982.  By 1987 the US Fish and Wildlife Service captured all the remaining Condors and put them in special breeding programs.

Here we are 30 years later and the hand of man has created a California Condor population boom.

A grand total of 405 Condors now live and 226 of them are free, using their majestic, 10-foot wingspan to fly over California, Arizona, and Baja, Mexico.  Another 179 Condors are in zoos and breeding programs.  This is wonderful conservation news and congratulations to those involved!

While the California Condor reached extinction before the wind power boom in California and the West, the bird's rebound has coincided with the boom in wind power that now provides 5% of California's electricity.  This result shows that wind that is zero carbon and Condors both can boom at the same time.

PJM Power Pool Doubles Renewable Energy: Green Power Booms In Home of Marcellus Shale Region

In 2005, the first exploratory Marcellus Shale gas wells were being drilled in Pennsylvania.  At the same time the first Marcellus Shale wells were drilled, renewable energy from all sources--including hydro and biomass--generated about 20 billion kilowatt-hours of electricity within the PJM power pool, the world's largest wholesale electricity market that extends from Illinois to New Jersey.

Fast forward to 2011, the entire production from the Marcellus Shale gas region had jumped to over 1 trillion cubic feet and comprised about 6% of US gas production.  Yet, defying predictions that the gas boom would kill renewable energy, electricity generated by renewable energy within PJM doubled to 40 billion kilowatt-hours from 2005 to 2011.

By the end of 2011, enough green power was being produced in PJM to power fully more than 4 million homes.  And more green power is on the way into the PJM grid. You too can buy Pennsylvania wind for your home or business through

While some still insist it is not possible, PJM is home both to the Marcellus Shale boom and booming renewable energy generation.  That's a fact.

PJM Power Pool Says It Is Handling "Massive" Shift From Coal To Gas

In its press release announcing the outcome of its 2015-16 electricity capacity auction, PJM says: "PJM is effectively, efficiently, and reliably handling a massive shift from coal to gas."  No hyperbole there. See

PJM reports that 14,000 megawatts of coal generation will retire and that will cut the coal fleet within the PJM region from about 75,000 megawatts to 61,000 megawatts.  So are the lights in the PJM power pool that serves 60 million people in danger of going out?

No. And here is why.

PJM also reports that it procured a record amount of new generation--4,900 megawatts--for 2015 to 2016.  Most of the new plant is natural gas.  This record underlines the point that every year some plants retire and some new plants begin operation.  The market is dynamic and focusing on just retirements, as Congressional Republicans attacking the EPA do, creates a false impression.

Another major protection of reliability is on the demand side of the market.  PJM reports 14,833 megawatts of demand response and energy efficiency cleared the 2015-16 capacity auction, or more than the total coal plant retirements.  Demand response clearing the market was up 5% and energy efficiency 12%.

PJM can dispatch over 185,000 megawatts of generation.  It's all time peak was 163,760 megawatts and it forecasts a 153,000 megawatt peak this summer.  PJM expects load growth of 1.2% between 2011 and 2012.

Wednesday, May 23, 2012

More Rate Cuts Push Shale Gas Savings Of $1,450 For Many Consumers

Smiles are on the faces of natural gas consumers, as historic savings grow to gargantuan levels.  In 2008, the annual residential gas bill in many parts of the Commonwealth was approaching $2,000.  Today, after the shale gas boom smashed prices, the average annual bill nears $1,000.

And the rate cuts keep on coming.

Serving the biggest geographic area of any gas utility in Pennsylvania, UGI is implementing yet another gas rate cut, this one being 4.3%.  UGI rate cuts cumulatively amount to 40%, saving an average residential consumer about $650 per year just in a lower gas bill. The average UGI monthly bill is now down to $86.58 from about $140, in parts of its large service territory.

For many consumers, annual savings are  a cool $1,000 for just the natural gas bill.

I say "$1,000 for just the natural gas bill," because lower natural gas prices have yielded lower electricity prices too, since natural gas is used to make electricity and plays a key role in pricing wholesale electricity power production.  A typical residential electricity consumer in Pennsylvania and many other places has seen savings of about 5 cents per kilowatt-hour or another $450.

Compared to prices in 2008 for gas and electricity, the shale gas boom has delivered total annual savings to homes heating with gas and using electricity of about $1,450.  Truly extraordinary and a real stimulus for the economy.

Tuesday, May 22, 2012

PA DEP Investigates Possible New Gas Migration Case

The Pennsylvania Department of Environmental Protection received on Saturday, May 19th a new complaint of possible gas migrating to private water wells and is investigating to determine the source of the gas.

According to press reports, the complaint of gas is about 2 water wells in Leroy Township, Bradford County. Gas has been vented from those wells.

To be clear, this investigation appears to be about methane migration and not about hydraulic fracturing fluids returning from depth to pollute water.

It would be surprising if pre-drill water testing was not done at the two water wells that now are the focus of the examination.  Assuming that such pre-drill testing was done, those pre-drill test results will help to determine the source of gas in the water.  Isotopic testing of the gas will also be likely needed.

Al Gore Tweets To Ban Fracking: More Carbon Pollution Would Be The Result

Al Gore is wrong about a key energy and climate change issue.  I know that won't surprise all of my readers, while others will insist Gore is not wrong at all.

Al Gore tweeted last night to support Vermont's ban of hydraulic fracturing. Gore's embrace of Vermont matters, as he has the respect of millions, including me.  Those thinking otherwise misjudge our diverse nation.

But, if his position wins the day, Gore would unintentionally increase carbon pollution, over the next 20 years, and would reverse the collapse in coal's electricity market share.  Indeed, Al Gore will find support for his proposal to ban fracking in some parts of coal country.

Beyond causing more pollution and not less, banning hydraulic fracturing would also bring more hardship for Americans straining to pay bills and looking for jobs. To the affluent, energy savings matter not much.

But to Pennsylvanians at or below the median income of $49,000 before taxes, $1,450 matters a lot.  And shale gas has saved many Americans, including tens of millions of poor Americans, $1,450 per year in lower natural gas heating and electricity bills, savings that would not have happened and would be lost, if all states took the path walked by Vermont and urged by Gore.

Gore's anti-fracking tweet comes, just when massive displacement of coal by gas has played a key role in rolling back US carbon emissions to 1998 or before levels.  EIA projects that US energy related carbon emissions will decline another 2.9% in 2012, after declining significantly in 2011, and for 4 of the last 5 years.

Coal generation declined from 52% of electricity generation in 2000 to 48% in 2008 and then collapsed to a forecasted 36% in 2012.  The collapse in coal generation and the resulting significant declines in carbon emissions both result from the shale gas boom that took off in 2008.

Enormous new gas supplies from shale resources caused plummeting natural gas prices that stopped a rush to build 150 new coal plants, pushed other coal plants to retire, and spurred massive switching from coal generation to gas.  In those ways, shale gas has been instrumental in avoiding annually 1 billion tons of carbon.

Exhibit A for how powerfully low natural gas prices is causing massive switching from coal to gas is Southern Company, until recently a huge consumer of coal.  It has cut its coal generation from 70% to about 33%, all because natural gas now is a cheaper way to generate electricity than burning coal.

While US has embraced shale gas and seen its energy related emissions plummet, Europe has yet to do so and has recently burnt more coal.  China is just beginning to develop shale gas but still gets about 70% of its total energy from coal.  Poland generates 93% of its electricity from coal.  The opportunity to substitute gas for coal exists around the world.

But what about renewable energy and the impact of gas on it?  The boom in shale gas in the USA coincides, just since 2008, with a doubling of wind energy just and an 8-fold increase in solar that saw nearly 2,000 megawatts installed just in 2011.  Globally investment in renewable energy power plants exceeded investment in all fossil fuel plants during 2011.

Declining prices for renewable energy and supportive public policies around the world are insuring a global renewable boom.  Moreover, as Governor Brown of California says, by lowering overall energy costs, more affordable natural gas creates more political will to support renewable energy.

Hard economic times make addressing climate and boosting renewable energy more difficult.  The natural gas boom is helping to make climate action possible in two, key ways.  It is displacing higher carbon coal and gas and also creating more economic opportunity and less hardship, thereby building will to face inconvenient climate truths, including that fracking will avoid 1 billion tons of carbon this year.

G8 World Leaders Highlight Upcoming IEA "Golden Rules For Gas Report" To Be Released 5/29

It is not often that the G8 leaders--folks like Obama, Merkel, Cameron, Hollande--tell us all what they will be reading in the coming month.  But that's what they did in part of their statement concluding their Camp David meetings.

The G8 world leaders will review a critical, upcoming report from the International Energy Agency about gas production and environmental safeguards that I and others have played a role in writing by submitting comments to a draft and by participating in a workshop to develop its content. The IEA's Special Report is entitled: "Golden Rules for a Golden Age of Gas."

The Report will be released on Tuesday, May 29 in London, Brussels, and Washington DC to the international media.

The upcoming Special Report was specifically mentioned by the G8 Leaders at their recently completed Camp David meeting.  The G8 leaders said:

"G8 Leaders recognized that the development of universal access to environmentally safe, sustainable, secure, and affordable sources of energy is essential to global economic growth and to their overall efforts to address climate change.  As such, they identified several actions for the G8 to take together:...
Welcome and agree to review the International Energy Agency's work on potential best practices for natural gas development as an input into our effort to share information on strategies for its environmentally safe and sustainable production.

Though I have read and commented on a draft and participated in an IEA workshop to discuss what should be in the Report, I have not seen the final report.  I too will be reading the final version of the IEA's "Golden Rules for a Golden Age of Gas."

Monday, May 21, 2012

BP Moves Forward With Big PA Wind Farm: $300 Million Investment

While a few environmentalists cheered the news that 2 wind farms in Pennsylvania were being cancelled, BP likely caused the cheering to stop by breaking ground at the end of last week on the $300 million Mehoopany Wind Farm in Northeastern Pennsylvania.

The Mehoopany wind farm will be 141 megawatts, consisting of 88 wind turbines that each generate 1.6 megawatts, costing about $2 per watt.  That is a competitive price for new power generation, especially since it will have zero fuel costs for the 25 years of its operating life.

Mehoopany will likely be the second biggest wind farm in Pennsylvania.  It will provide enough power for 40,000 homes.  Its power will emit zero carbon, mercury, soot, or any air or water pollution.

The Mehoopany wind farm will also employ 250 people, pay substantial lease payments to as many as 100 landowners, as well as significant state and local taxes.

The economic and environmental benefits of the Mehoopany wind farm projects are big and deserve loud cheering.  Indeed, most Pennsylvanians are doing so.

A Few Environmentalists Cheer 2 PA Wind Farm Cancellations, Even Though More Pollution Is The Result

The cheering from a few environmentalists at the demise of two wind farm projects in Pennsylvania reminds that for some no energy source is pristine or clean enough, and causing more pollution by blocking clean options troubles not everyone.  Laura Jackson of Save Our Allegheny Ridges, an anti-wind power group, was quoted by Don Hopey in the Pittsburgh Post-Gazette on May 16th as saying:

"Ridges in this state are not suitable ecologically for wind or any other development.  The ridges are important flyways for raptors and birds, they're steep and therefore ecologically sensitive, they're forested resource and they provide habitat for endangered species."

Of course, endangered species surveys are a requirement for all development in Pennsylvania, including the 25 wind farms in Pennsylvania that are now operating or under construction.

Despite wind having among the lowest environmental impacts of all energy sources--no air pollution, no water withdrawals, no water discharges--a few environmentalists have attacked many of the proposed wind farms in Pennsylvania.

Fortunately, for the Commonwealth's environment and economy, these attacks generally have failed.  As a result, Pennsylvania will soon have nearly 1,500 megawatts of wind generation at 25 projects, with a boom in 2012, as projects are rushed to completion prior to the expiration of the production tax credit.  No matter what anti-wind crusaders think, Pennsylvania's air and water is made cleaner by wind; good jobs are created; and electricity prices are made affordable by the large additional wind supplies.

The two wind project cancellations that cheered Laura Jackson were largely the result of a combination of low power prices and the failure of the Congress to timely renew the production tax credit.

The misguided attacks by a few environmentalists on wind power underline how some refuse to recognize a basic law of electricity generation development: Saying No Also Means Saying Yes To Something Else.  Block wind or gas or nuclear, and something else will take their place in the market and electricity dispatch.

When environmentalists say "No To Wind," they are saying yes to more electricity generation from coal and gas.

And when environmentalists say "No To Gas," they are saying yes to more coal and oil usage.

When zero pollution or cleaner options like wind or gas are blocked, then energy alternatives that emit more pollution increase their market share.  Denying this reality is refusing to face facts as surely as denying climate science.

The substitution of technologies that emit massive amounts of conventional pollutants is exactly what is happening in Japan, where all 55 of its nuclear plants have been shutdown.  As fossil fuel plants replace the nuclear units, Japanese carbon emissions skyrocket and are now 15% above 1990 levels--a worse performance than in the USA.

America Is On Track To Have 10 Million Net Metering Customers By 2022

Add the on-site power production and net metering revolution, to America's natural gas and solar revolutions that are underway.  And this revolution challenges the central power station with massive transmission infrastructure electricity paradigm.

Don't believe it? Consider the calculations below.

America is on track to have 10 million net metering electricity customers that could generate 93,000 megawatts of power, in the next 10 years.

From 2003 to 2010, the annual growth rate for the number of net metering customers has averaged about 50%.  In fact, in 2010, the last year for which EIA has data, the growth rate was 61%.

All that growth means that, as of 2010, America had 155,813 net metering customers.

If a 50% growth rate is maintained for the next 10 years, approximately 10 million customers will be net metering.  Even if the growth rate falls to 25%, 2 million customers will be net metering.

If one assumes that the average size of a net metered installation is 10 kilowatts, a relatively conservative assumption, America will have between approximately 18,000 to 93,000 megawatts of net metered electric generation capacity.  The range is big but a big deal, even at the low-end.

The burgeoning number of net metering customers is both a market opportunity for some businesses and a potential business challenge for traditional utilities.  Dawning now is the era of the energy grid, where more and more power is generated at the premises of customers.

Friday, May 18, 2012

Home/Business Electricity Generation Boom: 155,841 Homes/Businesses Net Meter Electricity

The lure of an electricity meter spinning backwards is causing a boom in on-site generation and the net metering of the output. The number of homes and businesses net metering jumped 61% in 2010 to 155,814, according to EIA data.

Another way to put it, one of every thousand electricity customers are already generating their own electricity and spinning their meters backwards by subtracting the power they produce from the power that they take from the grid.

Since 2003, when EIA began tracking net metering, the annual growth rate has averaged 56%.  Now customers in every state but Tennessee and in 655 electricity service territories are net metering and producing their own power.

Solar, biomass, and other renewable energy technologies are overwhelmingly the type of generation that customers are using to produce power on-site.  The boom in net metering is very much part of the renewable energy boom.

Do 31% Solar Tariffs Cripple Or Slow US Solar Development?

The United States Commerce Department yesterday announced a preliminary judgment imposing substantial tariffs on Chinese panel manufacturers for dumping product in the US below cost.  Many companies face a 31% tariff for dumping and up to another 4% for illegal subsidization.  The combined dumping and subsidization tariff could be approximately a total of 35%.

What does this decision mean for the deployment of solar in the USA that hit nearly 2,000 megawatts in 2011?

First, it does send an appropriate message to the Chinese that the US is serious about enforcing international trade law.  Even so, it must be repeated that the Commerce Department action yesterday was a preliminary judgment that many believe will be modified by lowering the amount of the tariffs, as the case moves forward.

But if one assumes no change in the announced tariffs, as the case moves on, a 35% tariff on the panels that are priced currently at approximately $1 per watt would add 35 cents per watt to the total price of a solar installation.  The tariff is on the price of a panel that is now often only 30% to 40% of the total solar system cost.

Many solar installations today now cost a total of $2.50 to $3.00 a watt so a 35 cent per watt tariff would push prices up to $2.85 to $3.35 per watt. Certainly, such an increase would slow solar development this year and would require about 18 months to erase, given the current rate of price declines.  It would delay achieving grid parity in some utility service territories by 1 to 2 years.

But a 35 cents per watt tariff would not appear to be crippling to solar deployment in the US.  And again the 35 cent tariff may yet be reduced.

Could Falling Oil Prices Signal Obama Loses Election?

The oil price and political fortunes are, indeed, tightly linked.

And so, from January to April, as gasoline prices surged upward, President Obama's political opponents led by Fox News barely disguised their glee that high and rising oil prices could cost the President the election. They strained mightily to blame the price increase on the President but quickly said the President had nothing to do with the recent 40 cent per gallon price decline.

Obama's opponents reflected conventional wisdom that only high and rising gasoline prices pose political peril, as consumers strain to pay gas costs and grow angrier as prices climb. But plummeting oil prices can also signal economic rocks ahead and danger for incumbents.

The oil price is the canary of the world economy.  And when oil prices fall below $70, they signal that the global economy is contracting and deflation, not inflation, is the major threat.  Remember that the US last enjoyed cheap oil--$33 oil--in December 2008, when the world economy was hurtling into a depression.

In fact,  when the world economy is healthy, oil prices are neither too hot nor too cold, in a range of about $70 to $95.  Yesterday's WTI price of a bit below $93 is exactly within that range.

So far, the falling oil price that has cut my personal gasoline costs by 46 cents per gallon is a welcome relief to consumers, good for the US economy and benefits President Obama. And a further decline would still be good for consumers and the President's prospects.

But this oil price decline has its roots in rising world economic danger that could end Obama's Presidency.
Austerity economics has driven Europe into a mixture of a depression, with unemployment above 20% in several countries, and a deepening recession.  China's growth rate remains positive but is falling, and the loss of Chinese economic growth ripples around the world. Just as the oil price falling below $70 meant in 2008 that the world's economy was deflating and contracting, if it falls below $70 now, it would mean that the global economy is seizing and demand is collapsing.

As $110 oil recedes in 2012, the new politically crucial oil price is $70.  If the price falls below it, the President would almost certainly lose the election, since that would mean another global economic collapse was unfolding.

Thursday, May 17, 2012

Pittsburgh Business Times Gives An Energy Leadership Award To Me

I am honored to be receiving tonight in Pittsburgh an Energy Leadership Award from the Pittsburgh Business Times.

I have been blessed to have had energy leadership opportunities outside and in government, as the Public Advocate for utility consumers in Philadelphia, Commissioner of the Pennsylvania Public Utility Commission, and Secretary of the Pennsylvania Department of Environmental Protection.  I thank Governor Casey and Governor Rendell, as well as the Pennsylvania State Senate, for nominating and confirming me.

As Governor Casey always said, the test is, what did you do with the power?  I have supported ending state-granted monopolies in electricity generation, natural gas supply, and telecommunications.  Customers now have market choices in those areas, and companies can enter the marketplace and compete for customers.  Though competition does not work in every sphere or for every service or need, competition in well-structured markets normally is the greatest means to efficiency.

I have supported policies that set standards for energy efficiency and clean energy production such as Pennsylvania's Alternative Energy Power Standard and Act 129 that established energy efficiency goals for electricity distribution utilities.  Nothing gives me more personal satisfaction than to see soon 25 wind farms in Pennsylvania and more than 6,000 solar projects already operating.

I have also supported the development of carbon capture and storage technology, as well as coal mine safety, both of which are essential for coal's future.  I am proud to have played a small role, as Chair of Pennsylvania's Coal Mine Safety Board, in making 2010 the first year no miner died on the job in Pennsylvania's long history.  The major credit for that tremendous accomplishment belongs to the coal mining companies and the United Mine Workers union.

I also had the privilege to serve as Secretary of the Pennsylvania Department of Environmental Protection from 2008 to 2011 and put in place 5 new regulatory packages that modernized, strengthened water withdrawal, water disposal, gas well construction, buffer protections for streams and that more than doubled the oversight staff dedicated to regulating the oil and gas industry. 

Pennsylvania is now producing more than 1 trillion cubic feet of gas and that production has helped to save gas and electricity consumers more than $1,000 per year.  Such savings are important for nearly every family but are essential for families without jobs or living in poverty. 

Over the years, I have seen how devastating living without heat or light can be, and I have supported policies to lessen the numbers of people, often children and the elderly, without the energy, utility, and water necessities of life. Energy poverty is grinding and life threatening.  Pennsylvania should not tolerate it in our midst.

At a time when every job is precious, natural gas production has generated tens of thousands of direct and indirect jobs.  It has lifted some out of economic peril or poverty.  It has created wealth for landowners that enabled some to stay on the land and maintain farms, while posing environmental and operational challenges that must be met every day. 

And it must be remembered that gas emits no soot, mercury, and lead as well as less carbon than coal or oil.  The growing use of gas to make electricity is reducing substantially air pollution across America and Pennsylvania.

Pennsylvania's air and waters are cleaner today than they have been in more than 120 years.  And more progress must and will be made.

Though climate changing pollution globally is not heading in the right direction, and the denial of the science is irresponsible, progress is being made in the US, where carbon emissions have been rolled back to levels seen nearly 15 years ago.   In fact, many environmental and energy trends are heading in a positive direction, thanks to work of so many in and outside government over decades.

Energy is also essential to our economy and the quality of life of our citizens.  Our electricity and gas bills are lower in constant dollars than they were 10 or more years ago, though oil prices stand as an important exception to affordable energy pricing.  Ending foreign oil imports in 10 or less years is a vital, achievable goal for our national and economic security

All of my work has involved the tremendous support of so many great colleagues and would not have been possible without them.  I cannot thank enough a very long list of people.

The progress made is a tribute to their lives and contributions.

Massive Data Show Warming Is Speeding Up Flowering & Leafing

A new massive data set of 1,588 wild plants on four continents show that flowering and leaving advances by on average 4 to 5 days with every one degree Celsius warming.  The information was published in the May 2nd issue of Nature.

Gardeners around the USA will not be surprised by this latest collection of data, as they have seen earlier blooming and leafing in most parts of the USA over the last 60 years. Amazing and depressing should be the only reaction to the fact that some continue to deny the fact of warming, despite the massive evidence that the rising concentrations of heat trapping gas are raising temperatures and changing the seasons.

The newly gathered empirical data also indicates that the warming experiments being run to project the impact of warming are understating significantly the impact of warming on leafing and flowering dates. Indeed, as more data gathers, the trend in climate science is to find scientists have understated changes and risks, rather than overstated changes and risks.  Sea level rise is just one such important example.

$913 Million Construction Overrun Hits Georgia New Nukes: How Much Gas, Wind, Solar Capacity Would That Buy?

The new nukes, Vogtle Units 3 and 4, that the Southern Company is building in Georgia. are already the subject of a $913 million cost overrun dispute. As Yogi Berra would say, "Deja Vu All Over Again!"
Each 1,100 megawatts, the Vogtle Units 3 and 4 had a combined price tag of $14 billion or about $7 per watt, or approximately 7 times the capital costs of a gas plant. 

The plants were scheduled to be completed by April 2016 and April 2017, though those dates will not be met.  Despite the sliding start dates for operation, the captive monopoly customers of Georgia Power are and have been paying monthly charges to build the nuclear plants.

The cost overrun and completion delays underline the difficulty and economic risks of new nuclear construction. Building a nuclear plant is really difficult.  It pushes the limits of human engineering, construction, and management abilities.  Big cost overruns often result.

Comparing the Vogtle initial $913 million cost overrun to the capital costs of gas, wind, and solar plants show just how big these cost overruns can be.  The Vogtle $913 million cost overrun by itself could have paid for approximately 1,000 megawatts of natural gas generation; 450 megawatts of wind power; and 330 megawatts of solar power.

When just the first cost overrun alone could have paid for a gas plant nearly the size of one of the nuclear units, the economic and financial risks of a nuclear construction program are enormous.  Those risks are made worse by the fact that the zero carbon emissions from a nuclear plant has zero economic value in Georgia and most parts of the world.

Moreover, gas, wind, and solar generation could be up and running in 3-years or less from the first day to the last day of development, as opposed to the 10 years or more needed to build a nuclear plant.

A few days before notifying the U.S. Securities and Exchange Commission about this first cost overrun of $913 million, Southern Company made state regulatory filings that disclosed good financing news for the nuclear units.  Interest costs for the capital needed to build the $14 billion plants are so far $2 billion lower than were projected about 5 years ago.

Frankly the lower than planned financial costs is good luck that has its roots in our extraordinary economic times and not something that can be routinely replicated in other projects.  It is not the equivalent of a technology or construction practice breakthrough. Clearly Southern, nonetheless, wanted news about the financing good luck to precede its disclosure about the $913 million cost overrun.

Good press management, however, will not erase the pain caused by more construction cost overruns that must be considered a real possibility.  Only construction excellence can keep these plants on budget. But history repeatedly shows that marshalling the excellence to stay on budget is hard to do when building a nuclear plant.

And even if the plants stay on budget, their costs are big, when compared to a new gas plant or emerging renewable energy and demand-side options.

Stunning Fact: 247,000 Water & Sewer Main Breaks Discharge Billions of Gallons of Raw Sewage Each Year

What are America's and Pennsylvania's biggest water polluters?  Near the top are sewer systems that are supposed to treat safely sewage but often do not, as a result of aging and inadequate infrastructure..

The Miami Herald published a great piece just looking at the massive raw sewage leaking from aging pipes in the Miami area.  It reports that 47 million gallons of raw sewage in two years were dumped into local waters and that nationally there are 247,000 water and sewer main breaks every year.

Leaking pipes release raw sewage all day and all year.  But, in many communities, the sewer system is designed and sized in a manner that it is simply not big enough to handle large volumes of water when it rains hard. The result is that huge amounts of raw sewage overflow into rivers like the Hudson, Delaware, Susquehanna, and many more.

The damage done to waters just by raw sewage dwarfs all the water impacts from gas drilling across the entire country.  That is not to excuse gas drilling impacts or to say work to limit gas drilling impacts is unimportant.  Minimizing gas drilling impacts through strong regulation and excellent operations is vital.

But much more attention should be placed on the most serious impacts to water like the damage done by raw sewage. Environmental groups also have a special responsibility to educate the public about what are the most significant sources of pollution to everyone's local waters.  It nearly all cases gas drilling will not be on the list of top water polluters.

Wednesday, May 16, 2012

Solar Exceeds 1,000 Megawatts In PJM: Lancaster County, PA Red Hot Solar Spot

Many would have bet that this day would never come or come no sooner than 20 years from now.  But it is here.

The PJM power pool now has more than 1,000 megawatts of solar generation operating or about 25% of America's solar capacity.  It is an astonishing amount.  See the May 15th announcement on the PJM home page at  PJM is the largest wholesale power pool and power market in the world, extending across 13 states, from Illinois to New Jersey.

PJM reports that solar capacity expanded an astonishing 139% in 2011, after growing more than 100% in 2010.  That means approximately 550 megawatts of solar was added in PJM just in 2011.

Interestingly, Lancaster County, Pennsylvania is a red hot solar spot on the PJM county map and among the leading counties in the entire PJM.  It has more than 50 megawatts of solar capacity operating.

The 1,000 megawatts of solar is big enough to impact pricing in PJM and to affect future transmission planning.  One thousand megawatts of solar lowered the market clearing price in many parts of PJM during many hours, especially expensive peak periods.  Undoubtedly, the solar expansion is saving all electricity consumers money.

The solar expansion will also impact future transmission needs and expenses. Importantly, a great deal of the 1,000 megawatts of solar has been built in parts of PJM where transmission constraints are most severe.  Local generation built in such areas may lessen or postpone the need for some major new transmission investments.

The solar is real and in our PJM home.  Most importantly, it has just begun and it will sweepingly change power markets and electricity service.  Solar is a revolution.

Tuesday, May 15, 2012

Gas Rig Count Falls But 1 out of 6 Gas Drilling Rigs Operate In PA

Follow the money.  That's what America's drilling rigs are doing. 

Even with recent declines in the oil price and a rise in the gas price, the oil to gas price ratio remains above a stunningly high 35 to 1, making oil financially attractive and dry gas not so. It is no surprise then that the latest Baker Hughes count of drilling rigs show the total rig count near record highs, a continued increase in rigs drilling for oil, and a decrease in those drilling for gas.

Though Pennsylvania has seen a decline in gas drilling rigs working here with the collapse of the gas price, Baker Hughes reports that 95 drilling rigs continue to operate in the Commonwealth.  In America, a total of 598 were drilling for gas, down considerably from more than 800 a year ago.

Currently, Pennsylvania has approximately 1 out of 6 of America's gas drilling rigs, an impressive number.  It is also indicates both that the Marcellus Shale has some of the nation's lowest production costs and that Pennsylvania is a keystone to America's natural gas production.

Gas Cuts Pollution & Boosts Competitiveness: Most Conservatives & Environmentalists Are Mute About This Truth

The natural gas boom offers embarrassments for both conservatives and environmentalists and is creating an unspoken bond of silence between both about gas's impacts on carbon pollution and the economy's competitiveness.

As I have noted, many environmentalists find it politically imperative to demonize gas, remaining silent about how gas is cutting carbon pollution right now by hundreds of millions of tons, or even insisting that it is dirtier than coal.  See;postID=6369447391402786324

Indeed, the big carbon cuts created right now by natural gas substitution for coal and oil are especially important, since these early reductions buy more time for commercialization of zero carbon options and to produce technological breakthroughs in areas like carbon capture and sequestration.  No matter today's carbon benefits of gas, many environmentalists are mute or worse.

But over on the right, the natural gas boom challenges one of the conservative movement's main global warming policy tenets. Time and again conservatives assert that reducing carbon pollution means raising costs and making the economy less competitive, in addition to rejecting climate science's conclusions. The natural gas boom, however, is a strong rebuke or counter-example.

The natural gas boom has avoided annually up to 1 billion tons of carbon pollution by causing the substitution of gas for coal generation and oil, while lowering the price of natural gas as well as electricity in many markets.

The reduction in wholesale power prices in PJM, the world's largest wholesale electricity market, from July 2008 to today is the equivalent of 5 cents per kilowatt-hour or more.  Many consumers who heat with natural gas have saved about $1,000 per year between their natural gas and electricity bills.

Indeed, using more natural gas, though a very big one, is just one of many ways that cutting carbon pollution can lower costs and save money.  Others include a long list of energy efficiency measures as well as forestry and agriculture practices, to mention a few.

The substitution of natural gas for coal and oil is now the prime example of the truth that carbon pollution can be cut and the economy be made more competitive at the same time.  It needs to be said, especially by those working to reduce the carbon loading of the atmosphere.

Two Big Political Embarrassments--One For Obama & One For Romney

Last week yielded two extraordinary political embarrassments--one each for President Obama and Governor Romney--and both underlined the polarized nature of the country and the probability of a close election ahead.

President Obama lost 10 counties and 41% of the Democratic primary vote in West Virginia to a felon--Keith Judd--serving time in a federal prison in Texas.!-Obama-loses-41-percent-of-W.Va.-primary-vote-to-federal-inmate.  They really do not like the President in West Virginia, where neither the Democratic Governor nor the Democratic Senator would say whether they voted for the President or the felon.  Indeed, that is one big Ouch!!!

But Governor Romney did not escape unscathed last week.  Rasmussen Reports polled the Presidential race in Massachusetts and found the President decimating Romney by 21 points in Romney's home state.

While Rasmussen did not include any other names in its polling question, Rasmussen states that 6% said that they would be supporting a third party candidate. While that 6% number for third party candidates will not impact the outcome in Massachusetts, other polls around the country are finding that about 6% of voters say they will be supporting a third party candidate. Third parties could yet decide the winner nationally of the 2012 race.

Romney could well win the Presidency but set a record for the margin by which a Presidential candidate lost his home state. Still another poll in March put Romney 24 points behind in Massachusetts. Familiarity with Romney has not bred fondness back home.

The data from West Virginia and Massachusetts drive home the polarized condition of the country and the probability that the 2012 Presidential race will be close like those in 2000 and 2004.

Monday, May 14, 2012

Biodiesel Production Hits Record Levels: Now Equals 1 Day Of US Oil Consumption

Biodiesel has many positive qualities, starting with its made in the USA, from mostly soybeans and grease. It has a positive energy balance of about 5.5 to 1, while gasoline has a negative energy balance.  It emits approximately 75% less carbon dioxide than petroleum.  And this good product is hitting record production levels.

EIA reports that 113  biodiesel plants produced 109 million gallons in December 2011, a record in the data collected by EIA.  EIA puts the 2011 annual production at 967 million gallons or about 23 million barrels.  That is a bit more than 1 day's worth of US oil consumption.

The EPA also reports what it calls biomass diesel production numbers.  See data for January to March 2012 at:

Growing biodiesel keeps American dollars home by reducing oil imports. Combined with increased domestic oil production, fuel efficiency, electricity and natural gas vehicles, biodiesel is part of the answer to ending foreign oil imports that remain America's biggest threat to our economy, environment and national security.

How Shale/Sub $3 Gas Created An Avalanche Of Switching From Coal To Gas

Though it is well understood that coal has lost a lot of electricity generation market share to natural gas, few are aware how natural gas prices below $3 have caused an avalanche of switching just in the last 12 months. Over a 12-year period from 2000 to the first quarter of 2012, coal's market share loss stands at 16 percentage points. But remarkably one half of coal's market share loss happened in the last 15 months.

Let's review a bit of energy history.

From 2000 to 2008, coal's electric generation market share declined from 52% to 48%, declining at about 0.5% per year.  While coal's share declined prior to the shale gas boom in 2008, the decline was slow and the size of the electricity generation market was growing, meaning that coal consumption and production was largely unaffected by the shift to natural gas in that period.  Coal was slimming but essentially holding its own.

All that changed in 2008, when shale gas production rocketed up, causing the price of natural gas first to fall to $6 per thousand cubic feet, then to $4, and now below $3 and sometimes even $2.  Once gas fell below $3, gas often became a cheaper electric generation fuel than coal and the conditions for an avalanche in the market had been created.

Before gas reached prices below $3,  gas fell to the $4 range in 2010, causing the rate of coal's market share loss to increase to 2% per year.  From 2008 to 2010, coal's market share declined from 48% to 44%.

And when gas went to $3 and below, the switch to gas became an avalanche.

From the end of 2010 to the first quarter of 2012, coal's electric generation market share fell from 44% to 36%.  This dramatic change shows how the shale gas boom intensified the coal versus gas price competition.

In that competition, coal's loss of market share is made more painful, because the electricity pie stopped growing for much of the time since 2008, as a result of the economic downturn, increasing efficiency, and one of the warmest 2011-12 winters on record.  EIA projects that the result will be substantial declines during 2012 of coal consumption and production, followed by a small rebound for coal in 2013, if natural gas prices rise above $3.

Saudi Arabia Building 41,000 MW of Solar, Showing Gas Kills Not Renewables

In a phrase that may trouble William Penn, the defender of religious liberty, some call Pennsylvania the Saudi Arabia of gas.  Saudi Arabia, meanwhile, is becoming the Saudi Arabia of solar by building 41,000 megawatts of solar by 2032 to supply one-half of its electricity.

That amount of solar would equal the entire solar capacity in the world today.  The Saudi solar entry is a tipping point in the solar revolution and another strong indicator that gas is not killing renewable energy.

The Saudis will devote a total of $109 billion to its solar plans, with $82 billion for the capital costs of the solar facilities, and the remainder to build solar factories, train Saudis, and operate the solar facilities.  In another sign of how competitive solar has become, the per watt cost of the Saudi solar program is to average $2 per watt, even though 25,000 megawatts of the total will be solar thermal/concentrating solar power systems and 16,000 megawatts will be solar PV.

The Saudis will begin their solar program by seeking bids in the first quarter of 2013 to construct 1100 megawatts of solar PV and 900 megawatts of solar thermal.  An interim milestone is to have solar provide 10% of national electricity by 2020.

Why are the Saudis taking the solar plunge? Solar is simply becoming competitive in more places around the world. Solar prices have crashed at a rate similar to natural gas prices in the US, reaching a projected $2 per watt capital cost in the Saudi program.  With zero fuel cost and the lowest production costs of any power generation technology, such capital cost pricing makes solar attractive economically.

The Saudis also face a doubling of their electricity supply by 2020 and the prospect of seeing one-half of their oil production consumed by their electricity generation needs, unless they diversify how they make electricity.  The Saudis calculate that they get more economic value by selling oil on the international market than burning it to make electricity.

The Saudis also want their solar program to generate jobs and electricity and so will require the manufacturing of some solar equipment in the Kingdom.  They see no conflict between green jobs and oil and gas.

In fact, the Saudis view the growth of solar as helpful to maximizing their oil wealth, a reminder again that renewable energy  will continue to grow strongly around the world over the next 20 years.

Friday, May 11, 2012

EPA Water Test Results Of Last 12 Dimock Homes Finds Water Safe

The EPA today released the test results of the last 12 homes and found no reason for further action, though one home had elevated methane levels, according to the Associated Press.

What can be said about the EPA test results? 

It found 1 home with substantially elevated arsenic levels, but the homeowner declined the EPA offer of water deliveries. 

It found a number of homes with elevated methane levels, but apparently has not done any isotopic testing to identify the source of the gas in the homes with elevated methane levels.

The EPA has generally found the water in the homes to be safe to drink, and its tests do not find evidence of hydraulic fracturing fluids returning from depth to contaminate the aquifer. 

Years of DEP testing also found no evidence of hydraulic fracturing fluids returning from depth to contaminate the aquifer, though isotopic testing of methane in 18 water wells during 2009-2010 did conclude that the gas had migrated in those properties from gas wells and was not biogenic or gas that was present in the water wells prior to gas drilling.

PA Drilling For Marcellus Gas To Continue Until 2070

When will the last Marcellus Shale well be drilled in Pennsylvania? And will any Pennsylvanian living today live to see the last Marcellus well plugged?

The folks at calculate in 2070 or another 68 years, as when the last Marcellus well will be drilled.  The 68 years calculation assumes gas beneath 13 million acres in 37 counties will be produced and a permit issuance rate of 3,000 per year.

When will the last Marcellus well in PA stop producing gas? Evidence is mounting that many wells will produce for decades, even 70 years is not out of the question, depending on the impossible to predict economics of energy and gas pricing in the distant future.

Consequently it is possible that Marcellus gas may be still be producing in 2140 and probably more than 100 years from now.  Very few if any Pennsylvanians living today will live to see the last Marcellus gas well plugged.

If one dates the start of Marcellus shale drilling in Pennsylvania to 2005, we are currently still in the early childhood of this play.  MarcellusGas.Org estimates that just 4% of the extraction area has been developed to date.

It also reports that Pennsylvania crossed the 5-figure milestone for shale drilling permits issued in May, with 10,033 permits issued by the first week of this month.  Of that total, more than 5,700 wells have been drilled or are being developed.

Thursday, May 10, 2012

Stewart Varney of Fox News Could Be The Most Ridiculous Journalist Alive

The competition is fierce for a Pulitzer Prize but also for the coveted Most Ridiculous Journalist Alive Award.  Based on his recent contribution to public misunderstanding of gasoline pricing, Stewart Varney may be the 2012 winner.

Appearing with Sean Hannity, Stewart Varney insisted that, while President Obama had nothing to do with the recent decline in oil prices, the President was totally responsible for the doubling of gasoline prices from $1.80 in January 2009 to about $3.70 today. Do people believe that nonsense--the part about the President being responsible for a doubling of gasoline prices since January 2009?  

By Varney's logic, a great accomplishment of President George W. Bush was to decrease the gasoline price from over $4 per gallon in July 2008 to $1.80, when he passed the baton to President Obama on Inauguration Day in January 2009.  We will skip over how presumably President Bush then was responsible for allowing in the first place $4 gasoline and $147 per barrel world oil price.

Does Varney remember why the world oil price crashed from $147 per barrel in July 2008 to about $33 in January 2009 and why gasoline dropped like a stone in that 6 months?

Could it be that the economy of the world collapsed and was headed to another depression from July 2008 to January 2009?  Could it be that the US GDP fell an incredible 8% in the 4th quarter of 2008?  Could it be that the US stock market nearly dissolved, as investors fled equities on a track eerily similar to 1929, until it bottomed on March 9, 2009 at about 6,500?

Since 2009, the world oil price has rebounded for one basic reason:  a world depression was avoided and rising demand for oil resumed.

Varney wants back $1.80 per gallon gasoline. In which case, he would need to accept a Depression and a stock market at 6,500, GDP collapsing at 8% per quarter, and 747,000 people losing their jobs in January 2009 alone.  That's how the modern world produces oil priced at $33 per barrel and gasoline at $1.80 per gallon. 

Varney must assume that his viewers so desperately hunger for attacks on the President that they will greet any manufactured attack, no matter how ridiculous it is.  It just takes the breath away.

Forbes Details How Gas Is Massively Cutting Carbon Pollution & Is Bewildered By Environmental Opposition

The AES Cayuga, Michigan power plant burns coal to generate electricity but it has not run since early March, according to Tim Worstall who details how shale gas is slashing carbon, nitrogen oxide, and sulphur dioxide pollution. Worstall's piece is a compelling, short read.

"Right now, with prices where they are, we're not economically viable," says Jerry Goodenough, the Cayuga plant manager, when explaining why the coal plant has not produced electricity for 2 months. Goodenough and Worstall gone on to explain how shale gas is causing coal plants not to run and even close.

Worstall catalogues the environmental benefits being delivered by shale gas --50% less carbon than coal; 67% less nitrogen oxide; and 99% less sulphur oxide.

After noting the enormous pollution reductions made possible by shale gas, Worstall ends by asking, why environmentalists oppose shale gas? Actually he asks, why do the "hippies" oppose shale gas?

Ouch and  well...

Wednesday, May 9, 2012

The Truth Some Environmentalists Dare Not Speak: Natural Gas Avoids Up To 1 Billion Tons Of Carbon Pollution

As part of its Beyond Coal campaign, the Sierra Club tracks the amount of carbon dioxide that it calculates has been avoided as as result of cancellations of proposed coal plants.  It is an impressive number--630 million tons annually.

But that is not all the carbon dioxide that has been avoided in the last decade.

Coal's market share has declined from 52% in 2000 to 37% projected for 2012.  The 15 percentage point decline in coal has yielded a corresponding rise in natural gas and renewable energy of about 10 and 5 percentage points respectively.  Each percentage point decline in coal's market share reduces carbon emissions by about 45 million tons.

Given that renewable energy typically is zero carbon and natural gas generation emits 50% less carbon than coal, replacing 10 percentage points of coal generation with natural gas produces a net carbon benefit of about 225 million tons per year and replacing 5 percentage points of coal with renewable energy avoids another 225 million tons.

The total carbon benefit from the change in the market share of coal, gas and renewable energy between 2000 and 2012 is about annually 450 million tons, more than 1% of world emissions.

One billion tons of carbon dioxide avoided is the result when one adds together the 630 million tons of carbon avoided from coal plant cancellations tracked by the Sierra Club with the 450 million tons avoided by the decrease in coal's market share and corresponding increases in natural gas and renewable energy.  That's a huge amount equal to about 18% of US energy related carbon emissions and 3% of world carbon pollution.

All that is very good news but inconvenient to those demonizing natural gas.

Why has so much carbon been avoided and so many new coal plants cancelled since 2005?  Why has the Sierra Club been able to claim such success for its campaign?  It certainly was not a national cap and trade law, as that went down to a crashing Congressional defeat.

The closest the Sierra Club comes to saying "natural gas stopped the coal rush" is to mention ambiguously the role of changed "market conditions."   Yet, while slowing the rate of electricity demand increases and increasing renewable supply contributed to new economic realities, the key changed market condition was that the price of natural gas--coal's principal competitor--dropped like a stone.  Why?

The shale gas boom that took off in 2007 turned natural gas prices from high to low.

Without the rise of shale gas, the Sierra Club's Beyond Coal campaign would have largely failed, though a smaller percentage of the proposed plants would have been cancelled anyway.  Mayor Bloomberg who generously funds the Beyond Coal campaign may understand this well.

Prior to the shale gas boom, America was preparing in 2005 to import large amounts of Liquefied Natural Gas (LNG) and natural gas prices were steadily rising, peaking in July 2008 at $13 for a thousand cubic feet.  At those gas prices, generators concluded that coal was their only option to provide generation that could run around the clock to meet demand.  The rush to build 150 new coal plants was on.

But the crash of natural gas prices from $13 to $4 and then to $2 not only stopped the rush to build new coal plants but also caused existing dual fuel plants to switch immediately from coal to gas.  Southern Company, once America's top consumer of coal, went almost overnight from getting 70% of its electricity from burning coal to 32%, as one example.

Still other owners of old coal plants announced that they would retire operating but old coal plants, because they could no longer compete with newly competitive natural gas generation that had sat nearly idle for 10 years, when gas was so expensive that running it was uneconomic. Cheap gas crashed the wholesale price of electricity, making inefficient, old coal plants the equivalent of a player, without a chair, when the music stops in a game of musical chairs.

And make no mistake the price of gas would not have crashed without the shale gas boom that now provides 30% or more of America's natural gas.  And without shale gas, the coal rush would not have stopped; Southern and other power companies would not have switched their dual fuel plants to gas; and many less than 107 old coal plants would have retired or been scheduled for retirement.

Yet, despite the massive carbon, mercury, soot, and lead benefits provided by the rise of gas, the bashing of gas is now politically correct, even a political imperative, in some but not quite all environmental circles.  In green precincts, denying the environmental benefits of natural gas is becoming as required as denying climate change is in conservative politics.

Certainly, gas production has negative impacts too, though less than coal, oil, corn ethanol, and many other industries.  Gas production is industrial activity and cannot be done with zero impact.  And it is important to work to lessen the negative impacts of gas production.

But natural gas can and should be made cleaner by further reducing methane leakage and insisting on strong regulation. The EPA final gas air emissions rule is an important step in that direction.

Even so, by displacing coal and oil, the rise of gas is delivering massive pollution reductions. And today's hyperbolic, factually unbalanced gas bashing has become itself a threat to the environment and public health.

NOAA Reports That Last 12 Months Were Warmest Ever

The empirical evidence just keeps piling up that the rising concentrations of heat trapping pollution in the atmosphere are raising temperatures.  In its monthly State of the Climate Report, the National Climatic Data Center at NOAA reports that the last 12 months--May 2011 to April 2012 were the warmest in US temperature records.  And

NOAA further reports that January to April were the warmest first four months of a calendar year in the US records.  In some cases records are not only being broken but also smashed.  North Dakota, for example, has broken some of its records by more than 10 degrees.  Such smashing of temperature records demonstrate the unchartered, extreme temperature ranges that we are now entering.

This dramatic temperature change impacts just about everything in our daily lives, including the natural gas energy business.  For consumers, the near absence of winter meant much lower heating bills across the USA, a welcome break for strained pocketbooks.

For the gas industry, the warm temperatures meant less demand and near full storage caverns that contributed to depressed prices.  For example, about 51% of America's homes heat with natural gas and their demand fell considerably.

Rising temperatures have positive and negative impacts for different people and different parts of the environment.  Additionally, at this point, the escalating temperatures are not sanely deniable, but many conservatives will.

And this fact should worry all: nobody  knows when the rising concentrations of heat trapping pollution and the rising temperatures will stop increasing.

Tuesday, May 8, 2012

Can You Name The Top 5 Nuclear Power States?

While Japan has taken off line all its nuclear plants and China is in the middle of an extraordinary nuclear plant building surge, US nuclear plants continue to provide about 20% of our electricity or 10% of our total energy.

Illinois, Pennsylvania, South Carolina, New York, and Texas, in that order, rank 1 through 5, in nuclear power capacity.

Illinois leads the nation with, 11,441 megawatts of nuclear capacity; Pennsylvania ranks second at 9,540 megawatts; South Carolina, New York, and Texas have 6,486, 5,271, and 4,966 megawatts respectively.

Thirty states have a nuclear power plant, with Vermont ranked number 30 at 620 megawatts.  The Vermont state government is embroiled in a battle with the owner of the nuclear plant, seeking to compel its closure.

While Vermont seeks to close its only nuclear plant, just three new nuclear power plants are being constructed or completed in Georgia and Tennessee.

As of 2011, renewable energy of all types, including biofuels, provided more total energy than America's nuclear plants.

Monday, May 7, 2012

Falling Oil Prices Bad News For Bashers Of Oil Companies & Obama

As of Friday, oil had fallen below $100, down $12 from its February high. Gasoline prices are retreating too, falling from a national average of $3.95 to $3.78, and to $3.67, where I fill up. The falling oil price is good news, except for those who insisted that rising oil prices were the responsibility of President Obama or supposedly conspiring oil companies.

The Obama and oil company theories--one the favorite of the ideological right and the other of the ideological left--are both nonsense.  In the first quarter, world oil demand fell 0.4% and world oil supplies are now up about 1.35 million barrels per day.  This softening of demand and boost in supply, combined with a cooler voices prevailing in the Iranian crisis, has led to the recent approximately 10% fall in oil prices since February, with the gas price lagging a few weeks behind the oil price.

Oil is fundamentally priced in a global market over which neither the President of the United States nor the oil companies headquartered in Houston have control.  Indeed US domestic oil production has risen under Obama, reversing a 40 year decline, and foreign oil imports are decreasing substantially.

As for the oil company conspiracy theory,  Exxon, BP, Shell, Chevron are small players compared to the national governments such as Saudi Arabia, Russia, Iran, Iraq, Venezuela, Brazil and the oil companies that they own.  National governments and/or the oil companies that they own control about 80% of the world's oil supplies, and they alone have the ability to fix prices.

Longer-term rising oil demand from the one-third of the world's population in China and India will continue to stress the ability of oil supply to keep pace.  As such, oil prices are likely to trend higher in the coming years, even without a war disrupting oil supply.

For that reason, dependence on foreign oil remains a threat to our national security, economic health, and environment.  Reducing oil consumption by energy efficiency and by substituting gas, biofuels, and electricity for oil cannot be done fast enough.

Japanese Nuclear Closures Provide A Painful Lesson About A Fuel Moratorium: More Pollution Can Result

In the rabid fracking debates, demands for moratorium on fracking are common. Vermont, for example, is moving forward with a ban on hydraulic fracturing, though it has little to ban, and though it will not ban the use of natural gas within its borders.

Proponents of these measures say or imply that the USA could immediately replace with renewable energy and conservation the 26% of its total energy coming from natural gas or replace the 38% of its electric energy coming from coal or both coal and gas.  Despite the fact that the US gets 98% of its total energy from oil, coal, nuclear, natural gas, large hydro, corn ethanol, biomass, and fracked geothermal wells, proponents of a moratorium insist that saying no to gas does not mean saying yes to coal or oil or nuclear power, in the real world.

Supposedly energy conservation, solar and wind--energy sources that are my favorites too--can fill any void right now. Japan is actually testing in a way this proposition, as it seeks to replace 33% of its electric energy in one year that had come from nuclear power.

Can a country close 55 nuclear reactors in one year, representing about one-third of its electricity, and not have carbon emissions rise? The answer is unsurprisingly no.  If any country could have done it, it would have been probably Japan, given its extraordinary, even heroic commitment to energy conservation.

 As Japan stopped operations on Saturday at its last of formerly 55 operating nuclear plants, Japan reported its carbon emissions jumped 15% since 2010.  Japan had reduced its carbon emissions to 1990 levels but not any longer, after the closure of the nuclear plants.

Japan found it impossible for conservation, despite mandatory and draconian measures, to make up for all of the loss of one-third of its power generation that nuclear power had provided, prior to Fukushima.  To replace some of the lost power, Japan had to also increase the use of coal, oil, and natural gas to make electricity and so carbon emissions have risen. It had to do this, even though it is scaling up its renewable energy supply from the current level of 9% of electricity supply to 20% or more in the next decade.

While Japan had been ahead of the USA in reducing its carbon emissions to 1990 levels, it no longer is.  With emissions 15% above 1990 levels, Japan has likely fallen behind the USA, where US energy related carbon emissions are back to approximately 1997 levels.

The 15% increase in Japanese emissions represent about 180 to 210 million tons of additional carbon pollution.   While Japanese emissions are rising, just the displacement of coal by gas in the USA will reduce US carbon emissions by 300 million tons in 2012, compared to 2000.

The approximately 4 percentage point decline in coal generation market share in the USA just between 2011 to 2012 will represent about a 180 million ton carbon reduction and a net 90 million ton carbon reduction, if one assumes that natural gas increased its market share by 4 percentage points to replace the coal generation.

Japan proves once again that saying no to one fuel means saying yes to something else.  And the something else may well have higher carbon emissions than the fuel that was stopped.

In the USA, China, Poland, and many more countries around the world, where coal and oil dominate, banning natural gas means saying yes to coal and oil and more pollution.