Friday, March 30, 2012

Senator Inhofe Attacks EPA Greenhouse Pollution Standard That Benefits Natural Gas: Will Republicans Follow His Lead Again?

After opposing the Natural Gas Act and seeking to repeal the EPA Air Toxic Rule, both of which benefit substantially natural gas, Senator Inhofe is adding to his substantial anti-natural gas positions by attacking the EPA proposed carbon pollution standard of 1,000 pounds per megawatt-hour for new power plants.  One wonders whether Senator Inhofe is being driven to his anti-gas positions by blind allegiance to conservative ideology or blind opposition to whatever the Obama Administration proposes. Interestingly, The Houston Chronicle woodsheds Inhofe in a blistering editorial, while urging support of the EPA proposed greenhouse gas rule (see the link at end of this posting).

Natural gas plants already meet the proposed EPA carbon pollution standard of 1,000 pounds per megawatt-hour, but new coal plants do not, as they would emit about twice the proposed standard, unless equipped with full carbon capture and sequestration technology.  CCS technology is currently expensive, barely commercially available, and should be a priority for research and development.

As with his past attacks on the Air Toxic Rule and the Natural Gas Act (sometimes called the Pickens Plan), Senator Inhofe is likely to have substantial Republican support and face large Democratic opposition to his latest assault on an EPA rule that benefits natural gas, this time the 1,000 pound per megawatt-hour pollution standard. The politics of natural gas is fluid, with supposed friends like Senator Inhofe aligned on big policy questions with some of the strongest opponents of "fracking." Sometimes, while initially heading in opposite directions, the political extremes can end up meeting.

Exhibiting a willingness to reject the political extremes, the American Natural Gas Alliance's (ANGA) first reaction to the EPA carbon pollution standard was tentatively supportive.  Perhaps, ANGA's position and the Houston Chronicle editorial indicate that Senator Inhofe and other mainly Republican members of Congress, who have blocked the Natural Gas Act, fought to repeal the Air Toxics Rule that will increase natural gas demand by about 1 trillion cubic feet per year, and now attack the EPA carbon pollution standard, may feel some blowback from the gas industry itself.

Certainly, the near solid Republican opposition to these 3 big initiatives that would boost natural gas demand hurts significantly natural gas investors and shareholders, as well as the environment and the broader economy.  With "friends" like Senator Inhofe and his allies in Congress, natural gas cannot afford any enemies.

This last point is motivating the Houston Chronicle that editorially called for Texas's two Republican Senators to support the EPA greenhouse gas rule and specifically singled out Senator Inhofe as someone not to be followed.  http://www.chron.com/opinion/editorials/article/Editorial-Proposed-EPA-caps-make-sense-3442402.php.

Read Professional Analysis Of EPA Dimock Test Results

B.F. Environmental Consultants recently submitted a great comment to this blog's March 21 posting about Answers to Kate Sinding's Questions about EPA's Dimock water test results for 11 homes that linked to the firm's analysis of the EPA water tests.  http://pennsylvania-solutions.blogspot.com/2012/03/well-hw-12-dimock-1262012-review.html.

The B.F. Environmental Consultants analysis is consistent with the EPA finding that the samples of water in the 11 homes was safe to drink, though at least one home had methane levels that required venting and were unsafe (methane itself is not toxic).  The analysis finds that iron and manganese--secondary drinking water pollutants and not health standards--were above established levels.  B.F.Environmental Consultants note that high levels of iron and manganese are common in water wells and can be relatively easily remedied with available water treatments.  They also note that iron and manganese can affect the appearance or color of water.

I recommend the B.F. Environmental Consultants' analysis to you.

Thursday, March 29, 2012

EPA Greenhouse Gas Rule Spotlights 1 of 3 Big Manipulations In Howarth Study

Professors Howarth and Ingrafea must be displeased with the historic EPA proposed greenhouse gas standard for carbon pollution of 1,000 pounds per megawatt-hour for new power plants, a standard that gas plants meet, while coal plants without expensive and barely commercially available carbon capture and storage equipment do not.  Without such CCS equipment coal plants emit from 1800 to 2200 pounds of carbon per megatwatt-hour of electricity produced, approximately twice what natural gas plants emit.

How could gas plants meet the EPA carbon standard, while coal plants do not, when Howarth/Ingrafea say that shale gas is as dirty or even dirtier than coal?  The answer to the question highlights one of the 3 big manipulations in the Howarth/Ingrafea paper.

Unlike all other researchers, Howarth/Ingrafea stopped their life cycle analysis of carbon pollution from coal and gas before the fuels are combusted.  Howarth/Ingrafea refused to include the carbon emissions from actually burning coal in a power plant, where nearly 100% of coal is combusted and typically inefficiently.  Indeed coal plants convert fuel to electricity much more inefficiently than gas plants do, making the carbon pollution from coal even higher, when it is finally used in the real world.

Including the emissions from coal, after it is actually combusted in the real world, would have destroyed the conclusion of Howarth/Ingrafea that gas is as dirty or dirtier than coal.  The solution to this problem for Howarth/Ingrafea, uniquely and alone, was to stop the calculation of pollution before coal is combusted.  Presto!  Problem solved.

The two other manipulations in the Howarth/Ingrafea study were to use extreme methane leakage rates by, as just one example, assuming falsely ubiquitous venting of shale gas in part of the well development process, and to reject, again uniquely and alone, the 100-year IPCC global warming potential factor and to substitute a 20-year global warming potential.  Methane dissipates almost completely within 15 years in the atmosphere, and so the use of a 20-year global warming potential was essential to reach a false conclusion that gas is dirtier than coal.

One good, unintended benefit of the historic EPA greenhouse gas standard for new plants is highlighting one of the three big manipulations in the Howarth paper.  The failure of Howarth to include carbon emissions, when coal is combusted at a power plant, is one of several decisions he made that makes his paper appear as an exercise in working back from a desired result and fitting his analysis to that desired result.  It is one of three big reasons that all other life cycle analysis studies of coal and gas contradict Howarth's false conclusion.

Hopefully, the EPA proposed rule will reaffirm a fact--gas emits less mercury, soot, arsenic, lead, and carbon than coal without full pollution controls, including carbon capture and storage technology.

Wind Generation Rises 50% Plus Nationally & In PA In January 2012

January 2012 was a really good month for wind power across America and in Pennsylvania.

Nationally January 2012 wind generation was up 54.8%, compared to January 2011.  In Pennsylvania wind generation rose from January 2011 to 2012 by 59.6%.  All data from the EIA.
www.eia.gov/electricity/monthly/epm_table_grapher.cfm?t=epmt_1_17_a.

Discussion in Congress about an extension of the wind production tax credit that expires at the end of 2012 continues.  The delay in Congressional action has already causes project delays for 2013 and some avoidable job loss.  Recently the idea of linking the extension of the production tax credit to a phase out date has been floated.

Pennsylvania Gas Generation Jumps 68% From January 2011 to 2012

The latest EIA data confirms that Pennsylvania is getting a lot more electricity from gas plants than just a year ago.  Gas generation plants increased production 68% from January 2011 to January 2012.

EIA reports that gas plants produced 4,252 thousand megawatt-hours in Pennsylvania in January 2012, compared to 2,520 thousand megwatt-hours.  See the Monthly Energy Report at www.eia.gov. This rise in gas generation came at the expense of coal generation that declined by an amount similar to the increase in gas generation.  As in the nation, gas is displacing coal generation in Pennsylvania.

Nationally gas generation rose 22.5% from January 2011 to January 2012.

Wednesday, March 28, 2012

Gas Drilling Nationwide Declines Twice As Much As In Pennsylvania

Pennsylvania's Marcellus gas drilling is withstanding low, low gas prices much better than gas drilling nationwide.  The number of gas drilling rigs nationwide has declined twice as much across America compared to Pennsylvania's shale, as gas prices plummeted.

Nationally the gas rig count has declined by 30% since October 2011, according to the Baker Hughes data for the week of March 23rd, and is near a ten-year low.

Pennsylvania has not been immune to the nationwide decline but has seen a much smaller reduction--about 15%--in the number of gas drilling rigs.  Currently 98 rigs are drilling for gas in Pennsylvania, down from 116. http://fuelfix.com/blog/2012/03/27/gas-drilling-rigs-decline-in-pa-and-nationwide.

The fact that gas drilling rigs have declined twice as much nationwide as in Pennsylvania is another indicator of the powerfully positive economics of the Marcellus.

While the national gas drilling rig count is near a ten-year low, the oil rig count is approaching a 25-year high as a result of the sustained high price of oil that is made even more attractive by the sustained low price of natural gas.

The decline in gas drilling rigs demonstrates that coal is not alone in being unable to compete with $2.50 natural gas.  Gas itself cannot compete with prices that low and so the drill rig decline.

Key VP Cheney Heart Transplant Facts

Good wishes to Vice President Cheney for a full recovery, after receiving a transplanted heart over the weekend.  He is one of the millions of beneficiaries of the tremendous advances in heart care since 1981, when my father died during heart surgery, and a few years after the former Vice President had his first of 5 heart attacks at age 37.

Here are key facts about Cheney's transplant:

1. Cheney was on the heart transplant waiting list for 20 months.

2. Cheney took the first heart offered to him.

3. The average wait for a heart is 9 months so Cheney clearly did not receive preferential treatment in receiving a heart.

4. The one-year survival rate for someone receiving a heart who is over 65 is 84%.  Cheney is 71.

5. The odds are favorable for the Vice President to have a life expectancy of 10 years.

Vice President Cheney has had 4 major heart procedures, including the heart transplant, as well as advanced medications.  His life has been extended and enriched as a result.

For those who have full access to America's medical treatments, miracles can and do happen.

Tuesday, March 27, 2012

Comment On NYT's Gas Reporter Mortgage & Drilling Saga

Though the New York Times' gas reporter has fans, it is no secret that I do not belong to his fan club.  Yet, I readily agree with those who say his reporting makes a difference in public opinion and outcomes.

Last week provided another example of the impact of the New York Times' gas reporter, when mid-level officials at the United States Department of Agriculture announced, via emails, that the USDA would reverse the historic policy of categorically excluding individual rural mortgage loans from a full NEPA review, if gas drilling was being done on the property.  According to the gas reporter, the USDA officials in New York began reviewing this policy, after reading his October 2011 story that asserted gas drilling conflicted with mortgages, and ended with a scary quotation mentioning the subprime loan fiasco that nearly destroyed our economy.  See the two NYT stories that I reference at the links that follow:
http://www.nytimes.com/2011/10/20/us/rush-to-drill-for-gas-creates-mortgage-conflicts.html.
http://www.nytimes.com/2012/03/19/us/drilling-property-mortgages-may-get-closer-look-from-agriculture-dept.html?_r=1&p

By the end of the week, Secretary Vilsack himself had stepped into the matter, reversed the email statements from a couple career officials,  and reaffirmed the historic USDA policy of categorical NEPA exclusion for rural loans.
http://www.nytimes.com/2012/03/23/us/usda-wont-review-mortgages-linked-to-drilling.html.

What amazed me about the original October 2011 story continues to amaze me today.  To date, despite all the space he has had on this issue, the NYT gas reporter has not presented even one example, let alone large numbers, of a mortgage not being repaid or going into foreclosure, as a result of gas drilling taking place on a property. 

We have a national mortgage foreclosure crisis, with record numbers of foreclosures, but not one is attributed to gas drilling on the property.  We have had gas drilling on mortgaged properties for decades, but not one example of how gas drilling and mortgages actually conflict when it comes to repaying a mortgage is found.  Not one!

In fact, I would bet my standard single beer of one's choice that the presence of gas drilling decreases mortgage default risk and the absence of gas drilling--and the associated income--raises it.

While the presence of gas drilling makes repayment of mortgages more likely and not less likely, and while USDA ultimately reaffirmed the historic operation of its rural loan program, the NYT gas reporter may have inspired after decades a federal lawsuit that could slow or stop a federal program that provided last year $18 billion dollars of loans to 140,000 families, many of whom are reported to be low-income. 
He has clout.  No doubt about that.

US Public Opinion About Nuclear Power Has Amazing Gender Difference

Fukushima did not cause the US public to cut and run on nuclear power, according to a poll by Gallup.
http://www.gallup.com/poll/153452/Americans-Favor-Nuclear-Power-Year-Fukushima.aspx.  US public support for nuclear power stood at 57% in 1994; 57% in 2011 before Fukushima; and is 57% in 2012.  The consistency is remarkable and makes one wonder if Gallup is really doing a poll (joking of course).  The overall support for nuclear power conceals a truly remarkable gender difference in opinion.

 Men overwhelmingly support nuclear power 72% to 27%.  Women actually oppose nuclear power, with 51% opposing and 42% supporting.  Men support nuclear power by 30 points more than women do.  Women oppose nuclear power by 24% points more than men do.  That is one of the bigger gender differences that I have ever seen on an issue.

Other interesting facts in the Gallup poll are that the high point of support for nuclear power was 62% in 2010 and the low point was 46% in 2001.  I am not sure what drove those numbers in those years.  Perhaps it is nothing more than polling variability or noise.  Or perhaps it has something to do with the economic times of 2001 and 2010.

Bottom line is that US support for nuclear power remains strong and steady, though the issue has one of the biggest gender differences that I have ever seen.

Monday, March 26, 2012

Promising $2.50 Gasoline: Pure Demagoguery As Chinese and Indian Demand Push Up Oil Price

Newt Gingrich says just make him President, and he will deliver $2.50 gasoline.  He further blames President Obama for the current national average gasoline price of about $3.84.

Judging by his poor showing in Louisiana, where he finished third with 16% of the vote, Gingrich's piece of demagoguery is not enough to rebirth a third time his now dead campaign. The only positive thing to say about Gingrich's $2.50 per gallon promise is that he did not promise gasoline prices below $2, as Michelle Bachmann did.

Thank you to the Republican primary voters for not rewarding the Gingrich or Bachmann nonsense.

As the previous posts show, US gasoline demand has been falling for 52 weeks straight.  US oil consumption peaked in 2007. And most remarkably, US oil production has ended a 38-year decline and is up 15% since 2008. Despite declining oil and gasoline demand and rising US oil production, US gasoline prices are rising and may average nationally more than $4 in the weeks ahead.

Fundamentally, declines in US oil consumption and increases in US oil production are being swamped by massive, rising demand for oil by China and India.  Powered upward by Chinese and Indian demand, world oil consumption increases each and every year and now stands at 89 million barrels per day, after being at 82 million barrels per day a few years ago.

The result of the rising oil demand is to reset global oil prices, with a floor at no lower than $80 per barrel. A normal trading range has become $90 to $125 and that means gasoline prices of $3 to $4 or more in the US.  With rising global demand every year and war risks threatening the supply of oil, the probabilities are stacked in favor of still higher global oil prices in the coming years.

Indeed, the only way to push gasoline prices back to below $2 would be a global depression and that is exactly why gasoline prices were below $2 in January 2009.  The world oil markets collapsed, creating for a short period even $30 per barrel oil, as oil traders believed a calamitous depression was likely, given that US GDP dropped 8% in the fourth quarter of 2008 and 6% in the first quarter of 2009.

Given these oil facts of life, what should US policy be?

Level with citizens that global oil is expensive. Stop the $2.50 demagoguery.  Then enact policies to use less oil, and we can do so in two ways.

We can increase the use of oil substitutes like natural gas, biofuels, and electricity for transportation.  Natural gas and electricity are cheaper and cleaner power than oil. We can also burn the oil we do use more efficiently, thereby using less or making our economy less oil-intensive.

Reducing oil consumption remains vital for our national security, national economy, and our individual pocket books.

US Oil Production Increases 15%, Reversing 38-Year Decline

Peak oil in the US was thought to have been reached in 1970, when the US produced 9.6 million barrels of oil per day.  The country's production declined steadily from 1970 to 2008, when just 4.95 million barrels per day were brought to the surface to meet our oil addiction.  See U.S. Inches Toward Goal of Energy Independence at http://www.nytimes.com/2012/03/23/business/energy-environment/inching-toward-energy-independence-in-america.html.

The 38-year long slide downwards from 9.6 million to 4.95 million barrels per day was both long and steep, nearly reaching a 50% reduction in production.  Yet, remarkably the slide downward not only ended but also reversed.

Today America is producing about 5.7 million barrels per day of oil. New and unconventional oil production in North Dakota and elsewhere is responsible. This increased domestic production, in combination with declining oil and gasoline consumption, means that oil imports now provide 45% of our fuel, down from a record 60% in 2005.

How much more could US oil production rise? Most expect US oil production to reach 7 million barrels per day and some insist 10 million barrels per day is possible.

By producing 7 to 10 million barrels per day, increasing biofuels production, boosting the use of natural gas and electricity in transportation, and raising fuel efficiency to 54 miles per gallon, Uncle Sam would be energy independent.

US Gasoline Demand Falls For 52 Straight Weeks But Prices Rise

US gasoline demand is steadily declining, but gasoline prices continue to rise, reaching last week a national average of $3.84 per gallon.

US gasoline demand has declined for 52 straight weeks, surpassing the 51 weeks of decline during 2008, when gasoline prices hit even higher levels than today's, according to the Associated Press.

The decline in demand results primarily from sustained high gasoline prices and more fuel efficient vehicles replacing gas guzzlers.  This blog has previously noted that the average new car gets 24 miles per gallon today, while a new car got 20 miles per gallon on average in 2008, according to data compiled by the University of Michigan.  

February car sales in the US were the strongest in years and were the equivalent of about selling 15 million cars per year.  New cars today often replace less fuel efficient vehicles that are 10 or more years old.  Moreover, new cars will continue to get more fuel efficient with every model year for approximately the next 13 years, as automakers comply with rising fuel efficiency standards.

To date, substituting natural gas and electricity for gasoline is a minor contributor to declining gasoline demand. If major substitution of gasoline with natural gas and electricity joins more fuel efficient vehicles, the decline in gasoline demand would accelerate over the next 10 years.

The nation's peak oil consumption year was 2007, and many experts believe that America will likely never use more oil than it did in that year.  The trends in gasoline consumption are one of the reasons for that view.

While US and European oil consumption have peaked, world oil consumption continues to rise.  Simply put, demand increases in China and India, with a third of the world's population, are straining the world oil market. 


Friday, March 23, 2012

Fascinating Fact: Calpine Is America's Largest Natural Gas Consuming Company

Consuming 3% of all natural gas and 10% of all gas generating electricity, Calpine is the single, largest consumer of natural gas.  Calpine also is the largest geothermal generator of electricity in the country  and ranks third in generating renewable electricity, if hydropower is excluded, an admittedly big exception.

Calpine has a total 28,081 megawatts of power generation at 92 plants, with 1,695 megawatts operating in Pennsylvania, including a new natural gas plant that came on line last year in York county.

As a result of the current very low gas prices, Calpine's natural gas generation is dispatching at prices well-below its coal competitors.  Indeed, natural gas plants are now running as baseload in many markets.  Low natural gas prices, therefore, are allowing Calpine and other natural gas plants to capture generation market share.

But the low natural gas price is a two-edged sword for electricity generators using gas, since the low-natural gas prices are cutting the wholesale price of electricity that all generators get paid for their electricity production. For whom are the low natural gas prices nothing but good news? Retail consumers in competitive gas and power markets who collectively are saving tens of billions of dollars.

CNN Video On Landowners, Regulators, Rule Violations Worth Viewing

This CNN report has the virtue of raising an important issue--notice of rules violations to landowners by regulators and drilling companies.  It also shows the importance of drilling to landowners and how landowners vary in their views about the responsibilities of themselves and drilling companies with whom they do business.
 http://www.youtube.com/watch?v=WsWcGEDtKYA&feature=player_embedded

The report captures the complexity, humanity, and risk of drilling.  It too is a reminder that the decision to drill is a major business decision, and any landowner should make it only after consulting qualified legal counsel.

My own view is that state regulators should provide a copy to landowners of violations issued to a drilling company operating on landowners' property.  I don't know what the practice of other states is on this subject and would like to know.

It, however, seems from the report the Pennsylvania DEP is considering plugging this notification and communication gap, and I hope that it does so.

Stunning Fact: Pre & Post-Shale Boom Forward Gas Prices Show Why Gas Is Now Replacing Coal

Look back to Nymex gas forward prices to see why the electricity generation market share of coal fell precipitously from 48% in 2008 to 39% in November and December of 2011.

Pre-shale and post-shale boom Nymex prices paint two starkly different energy worlds for producers and consumers of natural gas, including owners of power plants. The difference is as stark as that between night and day.

Prior to the shale gas boom and as recently as May 28, 2008, the Nymex forward prices had gas trading at about $11.30 for a thousand cubic feet in 2009, $10.50 in 2010, $10.60 in 2011, $10.75 in 2012, and $11 in 2012.  The 2008 pre-shale gas boom was a world of expensive natural gas indefinitely.

By May 12, 2011, well into the shale boom, with probably more than 20% of all gas supply coming from shale production, the nymex forward prices were about $4.30 for 2011; $5 for 2012; $5.20 for 2013; and $5.50 for 2014.  Nymex prices were cut by $6 to $5 per thousand cubic feet and inexpensive natural gas was a reality.

For owners of power plants, the sharply lower forward prices of gas have changed minds about using gas and have been hard to resist.

Thursday, March 22, 2012

Two New Reports Put Marcellus Gas At 267 to 698 Trillion Cubic Feet: Humongous

The Ponzi scheme narrative promoted by the NYT gas reporter and the recent Rolling Stone Magazine article took another data hit yesterday, when two new reports put the useable gas from the Marcellus at respectively between 267 to 534 trillion cubic feet (IHS) and 460 to 634 trillion cubic feet (ICF study).
http://www.pittsburghlive.com/x/pittsburghtrib/news/pittsburgh/s_787326.html.  Putting together the two reports done by consulting companies IHS and ICF, the range becomes 267 to 634 trillion cubic feet, enough Marcellus gas to meet total US demand for between approximately 10 to 33 years. 

While the spread about Marcellus reserves is substantial, it ranges between huge and gargantuan numbers.  That is the case, even if one prefers the EIA January, 2012 Marcellus estimate of 141 trillion cubic feet.  Indeed, if one assumes Marcellus gas production of 2 trillion cubic feet per year (more than current production but possibly conservative), the Marcellus will be producing gas for 70 years at the low end of the range to more than 300 years at the high end of the range.  No matter how one slices or dices the numbers, they are big and extraordinary.

Of course, arguments about reserves are becoming less speculative and even important, as each year of production goes into the history books.  Production from shale gas now has a 10-year history, with a shale gas boom since 2007 yielding extraordinary amounts of gas and crashing the price of gas.

Just last night I had a conversation with an earnest young man who had listened to Deborah Rogers, made famous by being featured as a shale gas financial expert in the NYT and Rolling Stones Magazine, and was completely convinced that shale gas is a ponzi scheme.  One would hope that when shale gas continues to provide large production for another 5 years that the stake would be driven through the Ponzi narrative. 

But probably not.  Unfortunately the Ponzi fabrication will likely be repeated indefinitely, as some just want to believe it so badly, and will join the radionuclide poisoning of waters as false statements that  never are eradicated.

Pew Poll Has Fascinating Data on Fracking: 74% Know Nothing Or Little About It

Is fracking becoming a partisan issue? Is it politically easy for President Obama to support natural gas production? What is his support worth to shaping public opinion? Are people like readers of this blog living in a bubble of our own making?  A Pew poll provides insights to answer key questions.

While you may even have heard more than enough about hydraulic fracturing, 37% of the public has heard nothing at all about it.  Another 37% have heard a little so that 74% of the public knows nothing or  little about fracking.  I confess surprise public knowledge or even awareness about it is so low.
http://shale.sites.post-gazette.com/index.php/news/archives/24401-as-gas-prices-rise-so-does-support-for-oil-and-gas-production

As someone well informed about gas production, you are not alone. The Pew poll found that 26% had heard a lot about hydraulic fracturing.

Among the 63% of the public who were aware of the issue, nationally support for hydraulic fracturing was 52-35.  There were clear partisan differences in levels of support.  Republicans supported it 73-15; Democrats actually opposed fracking by 33-52; and independents supported it 54-35. 

This polling shows that fracking may become a polarized partisan issue, though it is not yet.  It also demonstrates the importance to preventing further erosion among Democrats and Independents of President Obama's support for gas production and hydraulic fracturing and the strong regulation of both.  Plainly, opposition to fracking in Blue America has been stoked by communications like Gasland, the NYT Drilling Down Series, and the recent Rolling Stone Magazine Article.

Wednesday, March 21, 2012

Stunning Fact: $2.69 Per Watt For Solar In 2012

The solar revolution of competitively priced solar systems has arrived 5 years ahead of schedule.

A revolutionary $2.69 per watt will be the global average solar price for an installed system during 2012.
http://www.cleanedge.com/sites/default/files/CETrends2012_Final_Web.pdf?attachment=true.  See page 5 of the report. Just wow!  At that price, solar competes with grid power in many locations in the world and USA.

The global average price was $3.47 per watt during 2011 and is projected to decline another 20% during 2012.

It is impossible to overstate the implications for world energy supply and energy industries of a $2.69 solar price in 2012 that will go below $2 per watt in about 5 years.  These solar prices make solar energy as big an energy story as shale gas.  Amazingly, most politicians and more than a few in the energy industry remain unaware.

Tuesday, March 20, 2012

82 Degrees In Chicago and Other 2012 Heat Records

As this blog has documented with public opinion data, daily weather influences substantially public opinion about global warming, and so belief in global warming must be going up with the thermometers.

So far,  in 2012,  new record hot days are outpacing record cold days by a ratio of 14 to 1.  Chicago hit 82 degrees on March 15th, a new daily record, and a full 12 days earlier than ever for reaching 82.
http://capitalclimate.blogspot.com/2012/03/preliminary-data-lift-march-heat.html

Since 1980, the ratio of new record highs to new record lows has been increasing steadily, and for the last 10 years has exceeded more than 2 record highs for every record low.

With Friends Like Senator Inhofe, The Gas Industry Needs No Enemies

Perhaps most notorious for calling global warming science a hoax, Senator James Inhofe of Oklahoma certainly thinks of himself as a friend of the gas industry, and many in the gas industry would agree that he is.  Yet, after last week, when Senator Inhofe voted against the Natural Gas Act (the Pickens Plan) and rounded-up 30 co-sponsors to force a vote on repealing the EPA's Air Toxic Rule, the gas industry could do without friends like Senator Inhofe.

The biggest problem facing the gas industry today is inadequate demand.  Demand is simply not keeping up with supply.  The result is a depressed price of natural gas and a curtailment of gas drilling.

Yet, Senator Inhofe is busy in the United States Senate blocking the two biggest policies that would increase natural gas demand.    Indeed, the EPA Air Toxics Rule that Inhofe just hates would boost natural gas demand by more than 1 trillion cubic feet per year, according to estimates.  In turn, the Natural Gas Act is vital to accelerate the use of cheaper, cleaner, AMERICAN natural gas for transportation, a vital market for the future of the gas industry.

With global oil prices around $125 and war with Iran possible in the months ahead, it simply boggles the mind that any US senator would oppose the Natural Gas Act, let alone a senator who is supposedly a friend of the gas industry.  One cannot be a friend of gas development, if one blocks needed policies to use the gas produced.

Here is the simple truth.  The gas industry cannot be healthy if natural demand does not increase to match the tremendous new supplies it has produced.  For this reason, the most ardent opponents of shale gas oppose policies that boost natural gas demand. Hence blocking policies to increase natural gas demand is the surest way to cripple the gas industry today, and the gas industry needs no enemies with friends like Senator Inhofe.

Solyndra Distracts From The Real Solar Story: Record Installations and Plummeting Prices

While most reporting about solar in the US has been dominated by headlines about Solyndra's bankruptcy, creating the impression of a solar industry in crisis, booming solar installations around the world and in the USA and solar pricing at grid parity in more locations--not Solyndra--is the real and powerful solar story.  Here are the key facts.

Depending on which report you choose, the world installed between 26,000 to 27.4 megawatts of new solar in 2011.  Either number is a smashing new record that pushed the global annual solar business to $91.6 to $93 billion.  See the report at www.solarbuzz.com or the GTM/Clean Edge study at:
http://www.cleanedge.com/sites/default/files/CETrends2012_Final_Web.pdf?attachment=true.

During 2011, global solar installations skyrocketed 69% from 15,600 megawatts, with the USA doubling its solar installations and setting an annual record, according to Clean Edge.  Interestingly, while installations rose 69%, total industry revenues increased much less--29%--but for a healthy reason.

Sharp declines in the cost and price of solar during 2011 meant that revenues increased much more slowly than installations.  Globally solar averaged $3.47 per watt fully installed in 2011, and will be a revolutionary $2.69 in 2012, according to Clean Edge.

With the average global fully installed solar price falling below $3 in 2012, the solar revolution has arrived in 2012.  Solar in 2011 was already at grid parity in parts of the world and will achieve that tipping point number in more parts of the world and the USA during 2012 to 2015.

As recently as 2000, the global solar industry was just a $2.5 billion business and its transformation to a $93 billion behemoth and the rise of shale gas in the USA are the two most important energy stories of the start of the 21st century.

Monday, March 19, 2012

EPA Becomes Everybody's Dimock "Fracking" Punching Bag

Forgive Lisa Jackson, if she is about now rethinking the wisdom of entering the fracking fracas in Dimock, Pennsylvania.  The EPA is taking punches from all directions.

When the EPA announced in January it would deliver water to 4 families and conduct water testing of as many as 60 water wells, the gas drilling company under the microscope--Cabot Oil and Gas--greeted the EPA announcement with a both a critical press statement and a tough letter to the Wall Street Journal, saying that the EPA involvement was unwarranted and could make matters worse.  Some industry supporters even saw the EPA actions in Dimock as an indication that the EPA supposedly opposed gas production and hydraulic fracturing.

By contrast, back in January, most environmentalists reacted triumphantly and welcomed the EPA into the controversy.  That was then and not now.

Now that the water tests are back from 11 water wells, including 3 to which the EPA is delivering water, and show the water to be safe to drink, it's some environmentalists that are issuing tough denunciations of the EPA, while Cabot sings a different tune.  Celebrity Mark Ruffalo goes so far to say the EPA has allowed its investigation to be employed as part of the "gas industry's spin machine" and darkly demands that "independent" scientists review its testing, suggesting that the EPA perhaps even distorted the testing.
http://stateimpact.npr.org/pennsylvania/2012/03/16/environmentalists-critical-of-epas-dimock-results-epa-releases-sampling-plan/.

As long as EPA is behaving professionally and independently of those pleading cases, facts always will turn the EPA from hero to villain or villain to hero, depending on whom they gore.  Anyone who has sat in the regulatory hot seat is well aware of this pattern of being attacked from all directions, and facts are no shield. This pattern is also one reason that faith in government has reached dangerously low levels if society is to function reasonably.

As for me, I generally think more data and facts are better than less.  The EPA testing in Dimock adds to a huge amount of testing done by the Pennsylvania Department of Environmental Protection (DEP)  and others.  The EPA is not out to "get" the gas industry or be part of its spin machine. It decided to do this testing so that it could be assured of the water quality in the selected wells and report the results to the public.  I welcome its test results, no matter what they show.

US Ranks 3rd As World Blows To Record 41.6 Gigawatts Of New Wind In 2011

During 2011, the world set another record for the most wind power installed during a year--41,600 megawatts.  The world wind market measured in dollars rose 18% to $71.5 billion from $60.5 billion.
http://www.cleanedge.com/sites/default/files/CETrends2012_Final_Web.pdf?attachment=true.
It was globally just a $4 billion per year global industry as recently as 2000 and has had a meteoric rise.

The 41,600 megawatts of 2011 new wind generation will produce approximately the equivalent of 22 nuclear reactors sized at 600 megawatts each, roughly the size of the Three Mile Island unit that continues to generate power.  Putting it another way, the world installed enough wind power in 2011 to supply about 12 million US homes or 24 million European homes.  All in just one year.

China led 2011 wind installation, installing 18,000 megawatts; Europe installed 10,000 megawatts; the US 7,000 megawatts; and India was fourth with 3,000 megawatts.  China installed the most wind for the fourth year in a row.

World wind power was approximately 238,000 megawatts by the end of 2011.

Friday, March 16, 2012

WSJ Reports 258 Natural Gas Plants Being Built: Grid Reliability Is Assured

Today's front page Wall Street Journal Story reports that 258 natural gas power plants were under construction as of December 2010 and states the rise of gas unplugged another wave of new nuclear plants. True enough.

The article, however, does not say it, but the 258 new gas plants that will come on line around the country from 2011 to 2015 are another huge reason why the EPA Air Toxic Rule and Cross State Air Pollution Rule do not pose a broad threat to grid reliability.  http://www.freerepublic.com/focus/f-news/2859713/posts.

The Republican Congressional attacks on both rules focus on the plants that will retire from 2011 to 2015 but consistently ignore the new plants that are under construction that will substantially take the place of those plants that are retiring.  These attacks have gone so far to say the lights will go out.  Take a look at page 10 of the WSJ and the map there, detailing the location of the 258 gas plants under construction to see why the charge that the lights will go out is demonstrably false.

The nation is retiring plants that are more than 40 years old and pollute heavily, with modern, new plants that often are fueled by gas and that pollute often 95% less. The lights will stay on and the air will be cleaner as a result.

Updated: WSJ Story Indicates that Georgia And South Carolina Nuclear Reactors May Already Have $400 Million Overrun

Buried in a great story today on the front page of the Wall Street Journal by Rebecca Smith entitled, "Cheap Natural Gas Unplugs U.S. Nuclear-Power Revival," is the following about 2 nuclear reactors being built in Georgia:  "Nagging cost worries, however, are creating friction on both projects. Shaw Group, a Baton Rouge-based construction company hired by both Southern and Scana to build their reactors, recently notified the two utilities it had unanticipated costs, which may exceed $400 million for the two companies, and wants to discuss who should absorb them." 

History truly does repeat itself in the new nuclear construction world.  Just this cost over-run of $400 million that will be the first of many could build a 450 megawatt natural gas plant. 

And I bet that I know who will likely absorb this first $400 million increased cost: the monopoly, captured electricity ratepayers in Georgia and South Carolina.  In the case of the Georgia ratepayers, they have been and already are paying each month a nuclear construction surcharge for plants that may operate in 2016 or 2017.

Note: This story was updated based on communications from Mark Williams at Georgia Power.  The original version indicated incorrectly that the $400 million overrun was for costs at just the Georgia plants.  The story indicates that the $400 million of unanticipated costs are for both the South Carolina and Georgia plants, without any detail about the specific amounts for each.



Pickens Plan Defeated By 47 Senators, Even As War With Iran Looms

The real prospect of a war with Iran is not enough.  Gasoline prices averaging nationally more than $3.80 and over $4 in four states is not enough.  Despite these threats to our national and economic security, forty-seven senators were enough to defeat the Pickens Plan or the Natural Gas Act on tuesday in the US Senate.

The Pickens plan was defeated, even though 51 senators voted for it, since majority rule in the Senate ended once and for all, when Senator McConnell of Kentucky at the start of the Obama presidency routinely invoked Senate rules (filibusters) that require 60 votes to end debate or to pass the vast majority of important legislation.  The defeat of the Pickens Plan by 47 senators proves once more that the US Senate is totally dysfunctional.

While the Pickens plan is co-sponsored by Democratic senators Menendez of New Jersey and Reid of Nevada, and Republican senator Burr of North Carolina, the Republican senate caucus is responsible for its defeat.  Forty-four Democratic senators but only 7 Republicans voted to pass the Natural Gas Act.  Thirty-eight Republicans and 9 Democrats voted against it.  The defeat of the Pickens Plan largely was the result of conservative ideology, as exemplified by the editorial page of the Wall Street Journal, that opposes any effort to accelerate the substitution of oil with natural gas.

In Pennsylvania, right-winger Senator Toomey voted against the Pickens Plan but Senator Casey voted for it.

Though the Republican senate caucus overwhelmingly voted against the Pickens Plan, many of those members are loudly attacking President Obama for high gasoline prices. Here was a concrete opportunity to fight high gasoline prices and the anti-natural gas 47 senators vote no.  Those 47 members really think the American people are fools.

The defeat of the Pickens plan is a blow to the natural gas industry at a time when gas prices are at rock bottom.  But more important 47 senators voted to keep America importing huge amounts of foreign oil.  Forty-seven senators voted to keep fighting wars for oil.  Forty-seven senators voted against the national security and economic interests of America.

This is a big, bad vote.  Voters should remember it. For a complete roll call of votes, please see:
www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=112&session=2&vote=0041.  You will have to go to roll call votes on March 13th.  Then look for the vote on Amendment 1782 offered by Senator Robert Menendez.

EPA Tests Show Water Is Safe In 11 Dimock, PA Homes

The EPA water test results for the first group of 11 homes tested in Dimock, Pennsylvania, show the water is safe to drink.  While traces of arsenic was found in two homes and of sodium, methane, chromium, or bacteria were found in samples from 6 homes, no concentration above the safe level for any contaminant was found.
http://stateimpact.npr.org/pennsylvania/2012/03/15/epas-test-results-show-safe-drinking-water-in-dimock/#more-7925.  Included in the 11 homes with results showing that the water is safe are 3 homes where the EPA is delivering water. EPA also states that it will take another sample and test once more.

Testing by the Pennsylvania Department of Environmental Protection in 2009 and 2010 documented two things  in 18 water wells in Dimock, Pennsylvania:

First, methane had migrated from gas wells and contaminated 18 water wells.  Testing of the gas in the gas wells confirmed that the gas was not pre-existing or natural occurring gas but had come from nearby gas wells. Other evidence, such as high pressure readings in some gas wells and gas bubbling in the cellar of a gas well, also indicated that shallow gas had not been fully isolated.

Second, DEP testing found no frack fluids, chemicals, or other contaminants associated with hydrualic fracturing or drilling had contaminated any water well.

Starting in 2009 and continuing into 2010, the Pennsylvania DEP ordered remedies, including plugging gas wells, repairing gas wells, and installing methane treatment systems, to address the methane contamination of the 18 water wells. By the end of 2010, methane levels had been reduced to safe levels in at least 13 of the 18 water wells, according to testing done at that time.  The water was safe to drink at that time in those homes.

The EPA 2012 test results appear to be similar to the December 2010 DEP test results.


Thursday, March 15, 2012

EPA Posts Hydraulic Fracturing Study Slides & Answers

The EPA has posted answers to questions and its slides from the webinar briefing it conducted in February on the Congressionally-mandated study of "hydraulic fracturing and potential impact on drinking water resources."  www.epa.gov/hfstudy.

The EPA provides answers to 33 questions that are grouped in 6 categories and also 32 slides that it used to conduct its briefing on the progress of the study.

After Surging In 2011, New Solar May Surpass New Coal Plants In 2012

Less than 5 years ago,  rolling eyes or possibly laughter would have followed anyone who would have said that the USA would install 1,855 megawatts of solar generation in 2012.  But that's the amount installed in Uncle Sam's land during 2011, according to a report from GTM Research and the Solar Energy Industries Association.  www.seia.org/cs/news_detail?pressrelease.id=2006.

Other highlights of the report include:

1. On site solar installations led the way, with 800 megawatts built at commercial locations and 297 megawatts at homes.  Assuming 5 kilowatts per home installed, approximately 59,400 homes installed solar last year.

2. Large, utility scale solar projects feeding power into the grid accounted for 758 megawatts of the solar build.

3. The US was the fourth largest solar market in the world, with more than $8 billion of revenue in 2011.  Germany, Italy, and China were 1 through 3.

4. The US 2011 total of 1,855 megawatts more than doubled the 2010 installation amount. An incredible 766 megawatts was installed in the fourth quarter alone and that surpassed the prior quarterly record amount of 473 megawatts built in the third quarter.

5. For all projects through the entire year, the average installed solar cost in the US during 2011 was $4.08 per watt.

6. But the price declined through the year significantly.  By the fourth quarter for large projects, the price fell to $3.20 per watt.

Last but not least, the report projects that 2,500 to 2,800 megawatts of solar capacity will be installed in the USA during 2012.  If so, it is possible that new solar capacity will exceed new coal capacity built during 2012 in the USA.  This blog will be tracking the 2012 new solar and coal capacity numbers.

Gas Jobs Alone Are Not Enough: PA Jobs Performance Poor In January & 2011

The January 2012 jobs report for Pennsylvania is a stinker and documents that the Pennsylvania economy comparatively performed weakly in 2011, losing ground to most other states and the nation.  Pennsylvania lost 9,000 jobs in January, while 37 other states added jobs, and the nation grew jobs by over 200,000. The report underlines that the gas boom is creating desperately needed jobs, but that Pennsylvania's economic development strategy must be broad, diverse, and go well beyond natural gas extraction.

Digging into the Bureau of Labor Statistics data unearths more troubling facts.  For example, the nation and 22 other states reduced their unemployment rates by twice as much as Pennsylvania did during 2011.  Unemployment was down by 0.8% or more in America and 22 states, while it declined just 0.4% in Pennsylvania.  Indeed, 38 states were able to reduce unemployment more than the Commonwealth did in 2011. http://www.bls.gov/news.release/laus.toc.htm.

Among the 22 states that cut their unemployment rate twice as much as Pennsylvania or by 0.8% or more are Ohio where the unemployment rate fell by 1.3%; Maryland by 0.8%; Vermont by 1.0%; Connecticut by 1.3%; Wisconsin by 0.8%; South Dakota by 0.8%; Minnesota by 1.2%; and Colorado by 1.0%.

Pennsylvania's reduction in unemployment of just 0.4% trailed states, whether they started 2011 with a higher or lower level of unemployment than the Commonwealth.  California reduced its unemployment rate by 1.2% and Michigan cut its unemployment rate by 1.9%, as the auto industry roared.  But South Dakota cut its unemployment rate from 5% to 4.2% and Vermont reduced its 6.0% rate to 5%.

Pennsylvania's 2011 jobs performance is especially disappointing because it is a stark reversal from the period of 2010 into the first quarter of 2011, when Pennsylvania was among the top 5 states in creating jobs. The 9,000 jobs lost in January are a horrendous way to begin 2012.

Job creation requires world class education, skilled, healthy people, world class infrastructure, innovation, and effective public-private partnerships to compete in the modern world. While the gas industry has created low unemployment rates in Bradford, Tioga and other counties, the economic boost provided by gas can never be enough to bring prosperity to more than 12 million Pennsylvanians.  We must not fall into the trap of relying exclusively on the gas industry to lift all boats.

Hopefully, 2012 will be a better jobs year than 2011 was for Pennsylvania, but the January jobs report is far from comforting.

Wind Energy Jumps 27% and Pressures Downward Power Prices

Wind Energy had a banner 2011, with production jumping another 27%, and wind now provides about 3% of America's electricity, 20% in Iowa and South Dakota, 7% in Texas, and 5% in California.  www.eia.gov/todayinenergy/detail.cfm?id=5350.  All that new wind power is good news for consumers, because it is real electricity supply that puts downward pressure on market prices in competitive, "deregulated" wholesale markets that set electricity prices based on supply and demand.  In those competitive markets, more electricity supply from any and all sources of generation or less demand leads to lower prices for consumers.

In fact wind power has characteristics--very low production costs--that especially puts downward pressure on competitive market clearing prices to the benefit of consumers. Here is why and how wind benefits consumers in competitive markets, where every generator bids a price to provide service and no generator dispatches power to the grid, unless the generator's bid is accepted by the grid operator.

The grid operator selects or dispatches the generators based on the price they bid to operate, but importantly the generators do not normally get paid the price that they bid to operate. The grid operator puts the bids in order of lowest to highest, then selects the lowest bids first, and continues accepting bids, until he reaches the amount of supply needed to match demand.

There is always a last bid accepted from a generator who provides the last increment of supply needed to meet demand. The price bid by the last generator needed to meet demand is the market clearing price, and this price is paid to all generators selected, no matter that they bid less than the last bid accepted that becomes the market clearing price.  That generator's price is typically not the highest of all bids received, but it is always the highest bid that is accepted by the grid operator.

Since the price bid by the last generator accepted by the grid operator to meet demand sets the entire market price, consumers want the last bid accepted by grid operators to be as low as possible.  Two general means exist to lowering the price of the last bid accepted--increasing supply from low production cost generators or decreasing demand to move down the list of bids submitted to reach a lower last accepted bid.

Generation plants with very low production costs or costs to operate, such as wind, most renewables, and nuclear plants, typically bid zero into competitive markets to insure that they will be accepted or dispatched by the grid operator. Wind farms are complete price takers.  They do not set the market price, except in the rare circumstance, when they and other generation plants that bid zero provide enough power to meet demand.  In that circumstance, the market price actually clears at zero or can clear at negative levels, if generators bid money to dispatch.

Fossil fuel plants typically bid enough to cover the costs of at least their fuel--coal, gas, or oil--when operating or they would be losing money when running.

Here is a golden rule for consumers of electricity from competitive markets.  More wind or renewables in a competitive market produces more zero bids into the market.  More wind or renewables in a competitive market means that the last accepted bid, the market clearing price bid, will be lower than if the wind or renewables did not exist.

In this fashion wind or renewables lower the price of every single kilowatt-hour paid by every consumer, below what it would have been, had the wind and renewable power not been generated. A great deal for consumers and the environment, since wind power emits zero air and water pollution.

If you want to buy wind power for your home or business, go to www.choosepawind.org.



Wednesday, March 14, 2012

Gas To Take 14% of Coal's Market Share In 2012

An analysis by Barclays Capital of the power markets projects that gas will capture another 14% of coal's generation market share in 2012--an extraordinary number.  A Barclay analyst described US coal-fired generators as "frightened" by low natural gas prices and hammered home the point that natural gas is shifting US power production much more strongly from coal than the two EPA air rule packages, one of which has been enjoined by a federal court.  http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Coal/6014364.

Barclays notes that gas displaced little coal in 2008, when gas prices were high, and before shale gas production boomed.  But as shale gas boomed and gas prices began their steep decline, "...gas took 9% of coal's market share in 2009, 8% in 2010, 12% in 2011..."

If gas does indeed take another 14% of coal's 2011 market share in 2012, by my calculation, coal's 2012 market share could decline to 36%, an unimaginable number as recently as 2008.

The scale and pace of change in how America is producing electricity is one of this nation's most important unfolding events that this blog will be following daily.

Hail To Rick Santorum & His Delegate Path To The Nomination

Hail to Rick Santorum, the winner of Kansas, Mississippi, and Alabama in the last 4 days, to go with his prior victories in Minnesota, Missouri, Colorado, Iowa, Oklahoma, Tennessee, and North Dakota. Santorum's total is 10 states and counting.  Meanwhile last night Mitt Romney came in third in Alabama and Mississippi but won in Hawaii and American Samoa, to go with his prior island wins in Guam and US Virgin Islands.  Quite a contrast exists between the winning geography for Romney and Santorum, but that difference reminds that this contest is all about capturing delegates to the Republican convention.

Prior to last night, Mitt Romney needed to win 47% of the remaining delegates to go to Tampa with a majority of delegates, while Santorum needed to win 63% of the remaining delegates.  After last night, and capturing much less than 50% of the delegates available, Romney will need to capture even more than 47% of the remaining delegates.  Mathematically last night raised slightly the prospect that no candidate will have a majority of delegates when the convention opens, in which case the odds of Mitt Romney being the nominee drop considerably.

How does the continued presence of Paul and Gingrich affect the race for delegates and the nomination?  Gingrich is siphoning popular votes from Santorum, who has won the primary to be the champion of conservatives, and is helpful to Romney, since delegates are often awarded by Congressional districts.  Gingrich may be reducing the Santorum vote in some Congressional districts to allow Romney to claim delegates from them, while only winning 40% or less of the vote in a district.

In the battle for delegates, key remaining states will be Texas, California, Pennsylvania, New York, Illinois, Louisiana, North Carolina, and Indiana, but every single delegate is going to be valuable.

The delegate bottom line is that Mitt Romney must win about 50% of the remaining delegates, and he will have to claw for every remaining delegate to overcome the opposition of the dominant Republican conservatives who do not want to nominate him. This morning Rick Santorum is hearing more loudly than ever Hail To The Chief, and he is far from crazy to do so.

Tuesday, March 13, 2012

The Youngstown Earthquake, Hydraulic Fracturing, & Pennsylvania

Two things can now be said with certainty about the Youngstown Earthquake near an EPA Class II deep well injection site. 

First, the earthquake and seismic activity was caused by the injection of liquids--in this case drilling wastewater--deep underground for the purpose of disposing them.

Second, hydraulic fracturing to break open shale rock to release gas had nothing to do with the earthquakes.

In this sense "fracking" did not cause the earthquake.  But disposal of drilling wastewater at the Youngstown deep well injection site did, though the earthquake would like have happened, even if the material being disposed at this site came from a non-gas industry source.

EPA has permitted 144,000 class II deep well injection sites around the country, where 2 billion gallons per day of liquid are disposed.  The sites have been operating for many decades.  This extensive experience shows both that the overwhelming majority of these sites operate without triggering seismic activity and that  the injection underground of liquids can cause seismic activity in rare cases.

Ohio state government has reacted to the Youngstown earthquake by closing one deep well injection site and promulgating new regulations, governing the siting and operation of future sites.  The goal is to reduce the risk of seismic activity further by more stringent siting and operation criteria.

To date, Ohio has appropriately tightened deep well regulations to protect public safety.  In Pennsylvania, less than 10 deep well injection sites operate, out of the national total of 144,000, and the EPA has full responsibility for their operation.

Manhattan Institute Frames Renewable Standards For Non-Existent "Soaring" Electricity Prices

In a recent study trying to blame renewable energy  for supposedly "soaring" electricity prices, Robert Bryce for the Manhattan Institute is like a rogue homicide detective who is determined to frame an unfortunate citizen by investigating just one out of many suspects, while not even realizing that there is no crime, because the "victim" is not dead, but very much alive. In this vein, Bryce insists renewable energy is the cause of a faux energy crisis, saying that "residential electricity rates are soaring, and they are doing so at the worst possible time." www.manhattan-institute.org/html/eper_10.htm.

The first and fatal flaw with the Bryce paper is that electricity prices are not soaring. There is no crime for which to frame renewable energy.

The Energy Information Administration reports: "Average U.S. residential electricity prices are forecast to rise by 0.4 percent in 2012, and then fall by 0.9 percent in 2013.  These growth rates compare with an average annual increase of 2.6 percent during the past five years."  www.eia.gov/forecasts/steo/pdf/steo_full.pdf.

In fact, in many areas of the country like Pennsylvania electricity rates will likely fall in 2012, as a result of low-natural gas prices, stable or even declining demand, and increased supply substantially from new renewable energy generators in regional power pools around the country.

Since electricity prices are not soaring, Bryce's paper trying to blame renewable energy is a desperate, ideologically-driven effort by the conservative Manhattan Institute to blame renewable energy, a new scapegoat for the right, for a non-existent problem.

Never realizing that electricity prices are not soaring, and there is no victim, Bryce concocts a theory that focuses only on renewable energy as the cause of soaring electricity prices.  Forget other upward pressures on electricity rates like steadily rising coal costs; state deregulation of retail rates in certain states; nuclear energy charges in Georgia to build two incredibly expensive nuclear plants there; but instead frame renewable energy for the non-existent crime of "soaring" residential electricity rates.

Bryce's method for framing renewable energy features comparing two groups of 7 states--coal dependent states with no renewable energy portfolio requirement and coal dependent states with a renewable energy requirement.

He curiously selects Wyoming, North Dakota, Utah, Georgia, Oklahoma, Arkansas, and South Dakota for his non-RPS group.  This curious selection raises questions such as, why these 7 states?  Why not Kentucky, West Virginia, and Nebraska for example which are also coal dependent states without an RPS and which are listed by Bryce among states with the lowest rates?  What results would Bryce had if he substituted Kentucky, West Virginia, and Nebraska for South Dakota, North Dakota, and Arkansas?

For the coal dependent RPS states, Bryce picks Ohio, Michigan, Colorado, Wisconsin, Delaware, Minnesota and Maryland.

He concludes that the 7 states with the RPS had average rate increase from 2001 to 2010 of  54%, while the non-RPS states rose 24%.

Beyond the fatal flaw that electricity rates are not soaring and so renewable energy or nothing else caused the non-existent problem, here are 6 more problems with Bryce's analysis:

1. Bryce cooked the statistical books in his selection of states.  His group of 7 coal dependent states without an RPS leaves out Kentucky, West Virginia, and Nebraska and it is clear why.  Kentucky's rates have increased from January 2001 to 2010 by 72 % and 82% through 2011; West Virginia up by 49% through 2010 and 59% through 2011; and Nebraska up by 61 % through 2010 and 68% through 2011.

Had Kentucky, West Virginia, and Nebraska been substituted for South Dakota, North Dakota, and Arkansas in Bryce's group of 7 coal dependent states without an RPS, Bryce would have found a very small difference between his two groups of states. The rate increase in the non-RPS states would have been 43% on average versus 54% in the RPS states.

2. The difference in rate increases between the two groups of states would essentially vanish if Bryce used 2011 data, instead of stopping his analysis in 2010. For example, Georgia, which is in Bryce's group of 7 coal dependent states without an RPS, had a 10% increase in 2011, probably mainly the result of rate increases already charged to build two nuclear plants that supposedly will begin operating in 2017.  Simply put, Bryce's data is dated.

3. In fact, all 7 states in Bryce's group of 7 states without an RPS saw rates increase in 2011, while 2 of the 7 states in Bryce's group with an RPS had rates decrease in 2011.  In short, rates went up more in the coal dependent states without an RPS in 2011 than was the case in the states with an RPS.

4. Bryce fails to consider at all the role of sharply increasing coal prices over the last 11 years in the price of electricity.  Indeed, coal prices have been increasing about 6% per year for the last 11 years or nearing 100% over the period.  Rising coal prices have pushed up electricity prices much more than any renewable energy requirement.

5. Bryce fails to understand the role of deregulation in price increases.  Four of the 7 states in Bryce's RPS group deregulated retail rates during 2001 to 2010.  Those four are Delaware, Ohio, Maryland, and Michigan, and rate increases in Maryland and Delaware are almost completely the result of how the states deregulated. None of the states in Bryce's non-RPS states went through the deregulation of retail rates.

6. Bryce includes in his non-RPS group several states--North Dakota, South Dakota, Oklahoma, Utah-- that have large amounts of electricity provided by non-profit rural electric cooperatives that have lower costs of capital and other financial advantages compared to for-profit investor owned utilities that dominate the states in the RPS category.  I doubt Bryce wants to make a case for public power or non-profit coops, but his analysis would support such ownership more than it does his attack on renewable requirements.

To conclude, Bryce has it wrong.  Electricity rates are not soaring.  There is no culprit to be found for a non-existent problem.  Renewable energy standards and increasing renewable energy had little effect on the price of electricity.  Indeed studies by the Energy Information Administration and others have reached this conclusion.

Much bigger influences on electricity power rates are the price of fossil fuels, especially coal and gas, that fuel a combined 65% of all electricity generated, the cost of capital, and increasingly simple supply and demand for power in competitive or "deregulated" markets that price electricity.

By creating more supply for electricity, often by leveraging substantial private investment that largely is not directly recovered in an electricity rate base or rate, renewable energy standards can cause the market clearing price for electricity in competitive, wholesale power markets to be lower than if the new renewable supply did not exist. More supply or less demand lowers price all other factors being equal. The nation got 3% of its electricity from wind power in 2011, and Texas got 7% of its total electricity from wind.

If wind had not operated at all, electricity prices paid by consumers in America and Texas would have been higher in 2011, because wind power in competitive markets bids zero and takes whatever price at which the market clears.  By doing so, wind and other renewables prevent more expensive units from being dispatched and setting the entire market price at a higher level.

Indeed, among the 10 states with America's lowest electricity rates, three states--Washington, Idaho, and Oregon--have the highest amount of power coming from hydro systems, America's biggest renewable energy power source.  Renewable energy is good for the environment, public health, our economy, and consumers.






Polling Thrills For Republicans: Obama Approval Hits Record Low In CBS Poll

With Alabama and Mississippi voting tonight, the CBS poll released last night should encourage Republicans and be a cold shower for Democrats who increasingly need one.

CBS has the President's approval at 41%, down from 50% last month.  www.cbsnews.com/8301-503544_162-57395703-503544/poll-obamas-approval-rating-sinks-to-new-low/?tag=cbsContent;cbsCarousel.  The 41% approval is a record low in the CBS poll. The poll had a 47% disapproval number for the President..

While I do think the recent increase in gas prices probably has hurt the President a bit, I have my doubts that the President's numbers fell 9 points in one month.

 I suspect the President's approval is somewhere between 44% and 48%.  Gallup in fact yesterday had  Obama's approval rating rising to 49%.  www.gallup.com/poll/153194/Obama-Job-Approval-Rating-Reaches-Weekend.aspx.

The Republican nomination, nonetheless, remains valuable, as long as the President's approval rating is below 50%, and it seems to be so this morning, no matter what poll one reads.

Monday, March 12, 2012

Santorum Must Hammer Romney's Failed Jobs Governorship

After winning Oklahoma, Tennessee, North Dakota, and Kansas on saturday, Rick Santorum won the religious right-wing of the Republican party, but his victory came at the price of becoming nationally unpopular (44.5% disapproval and 33% approval of Santorum) and allowing Mitt Romney to squeak out wins in Michigan and Ohio.  Just enough Republican voters have been buying Mitt Romney's claim that he can reinvigorate the US economy to edge him toward the nomination, no matter how successful Santorum is with thrilling social conservatives. To win the nomination, Santorum must hammer into public consciousness that Mitt Romney failed miserably to create jobs as Governor of Massachusetts.

Massachusetts under Romney ranked 47th in job creation; by 2006 Massachusetts had 16,000 less jobs than in 2002.  Job growth in New York was three times faster; in California jobs growth was 5 times faster; and jobs growth in North Carolina was 8 times faster than in Massachusetts during Romney's tenure.  See Wall Street journal article at: http://articles.marketwatch.com/2010-02-23/commentary/30748666_1_mitt_romney_jobs_growth_massachusetts

 The people of Massachusetts hired Mitt Romney to do for them what Romney now says he will do for the America--create jobs and economic growth.  Romney failed and would have been fired by the voters had he run for re-election.

Yet fixated on ideology and so misses Romney's jugular, Newt Gingrich calls Romney a "moderate" or "liberal" Governor of Massachusetts and heads off on one more riff about Romneycare.  A better adjective is "failed," and it still is the jobs issue that will decide the nomination and the general election.

If Republican voters become aware of Romney's lousy jobs record as Governor of Massachusetts, Romney's last claim to the nomination will meltdown.




Stunning Fact: Fukushima Closes One-Eighth Of World's Nukes

While a lot of Fukushima anniversary commentary about nuclear power's prospects around the world focused on new nuclear plants under construction in China, Russia, and India, one stunning fact got little attention that makes clear that the last year has been the worst for nuclear power in its history. The world's third and fourth largest economies--Japan and Germany--closed at least temporarily 60 nuclear reactors or 1 out of 8 in the world, in the year after Fukushima.  Germany shutdown 8 nuclear reactors permanently in 2011, and, today in Japan, 52 out of 54 nuclear plants are off-line, with their future uncertain.  Germany will also close all of its remaining 13 nuclear plants by 2022.

Prior to the March 11, 2011 earthquake, tsunami, and Fukushima nuclear disaster, Japan generated one-third of its electricity from nuclear power.  Japan closing 52 of 54 nuclear reactors or one-third of its power in a year is the equivalent of  the USA closing nearly all of its coal-fired power plants.  Given how much of its power came from nuclear reactors, it boggles my mind to think Japan has done a "nuclear cold turkey."
www.msnbc.msn.com/id/46676913/ns/world_news-the_new_york_times/#.T1noiONSSEY.

What has Japan done to replace nearly all its considerable nuclear power?  Super aggressive conservation practices have been the most important means to replace the lost power.  Well before the Fukushima disaster, Japan was a world leader in energy efficiency so all the low-hanging efficiency fruit was picked long ago in Japan. After Fukushima, wringing more energy savings out of Japanese homes and businesses has required changes in lifestyles or sacrifices to use another word.

In addition to cutting electricity consumption, Japan boosted the use of gas and coal to make electricity, increasing carbon emissions in the process.  For the long-term, the Japanese have also embraced policies to increase sharply renewable energy, as Germany has done too, in reaction to the Fukushima disaster.

Friday, March 9, 2012

Exxon CEO Rex Tillerson Fires Missiles At Obama Administration While Natural Gas Prices Head To $1.50

While Exxon CEO Rex Tillerson filed missiles yesterday at the Obama Administration for supposedly inhibiting the production of natural gas (see page 3 of today's Section C of the Wall Street Journal), the Henry Hub price closed yesterday at $2.18.  Some of the smartest people in the energy business with whom I was this week at an International Energy Agency workshop in Warsaw, Poland are predicting a $1.50 price this spring.

Here are obsrvations I would make about claims that the Obama Administration is inhibiting gas production.

First, the Obama Administration is doing a lousy job of slowing down gas production if that were its goal, given 2011 was an all-time record production year.

Second, the Obama Administration is responding, as it must, to massive public concern about fracking.  Yes, a lot of that concern is based on misinformation or outright propaganda but there are also real issues.  And the level of public concern is real and large.  Just ask Governor Christie, Mitt Romney's national co-chair, who implemented a one-year ban on fracking in New Jersey, what the public mood about "fracking" is in the Northeast.

Third, what is the biggest problem facing the gas industry today?  Too little demand? Or too little production? $1.50 gas as a real possibility this spring answers those questions.

Fourth, the Obama Administration has done more to promote natural gas demand than any Administration in US history.  Take a look at the EPA Air Toxic Rule as just one example.  There are many more.  And the Obama Administration has taken immense heat for these rules and other initiatives that promote natural gas demand.

PA Gas Royalty Checks Exceed $5 Billion

Royalty payments to mineral owners probably have exceeded the $5 billion mark, according to estimates done by the good folks at www.marcellusgas.org/graphs/PA#royal_current.  Nearly 50% of the total payments have flowed into Washington and Greene counties.  Both are located in Southwest Pennsylvania, where Marcellus gas wells not only have been drilled in large numbers but also have been connected to pipelines and are delivering gas to consumers.

The Marcellusgas.org folks also have interesting data on how much counties will collect in impact fees.  They project that Bradford, Tioga, Washington, Lycoming, Susquehanna, and Greene are projected as the top 6 counties for impact fees.

The impact fees are based on wells drilled or developed, while royalty payments are based on gas volumes flowing into pipelines.  Currently a lot of wells drilled are not connected to pipelines in Pennsylvania.

Eagles Make Major Off-Season Acquisition: Wind and Solar

Last year's heralded crop of free agent signings led to an 8-8 season and no play-off spot, so the Eagles are re-powering for a Super Bowl.  Yesterday, the Eagles announced that they had formed a new partnership with NRG that would install a 3 megawatt solar system and 14 micro wind turbines at Lincoln Financial Field.http://mobile.philly.com/sports/eagles/?wss=philly/sports/eagles&id=141085513.  The Eagles remain the leading sports franchise dedicated to reducing environmental impacts through recycling, composting, and clean energy practices.

The wind and solar systems are scheduled to be operating by December 2012, when the Eagles should have clinched a playoff spot and be Super Bowl bound.  Skeptical? Hope springs eternal for NFL fans in March of every year.

Booming US Car Sales, CAFE Standards, & Detroit At Half-time

Historically skyrocketing gas prices meant a loss of market share for the Big Three Detroit automakers to Japanese and other companies.  Why?  The Big Three simply did not make attractive, competitive fuel efficient cars so they lost market share when consumer preferences shifted to gas sippers and away from gas guzzlers.

In another sign that US carmakers are more competitive, despite the current jump of gas prices to a national average of $3.74, Detroit sold more cars in February than anytime since the collapse of the car market, following the 2008 economic meltdown.

Chrysler issued a statement: "Our product portfolio now contains some of the most fuel efficient vehicles in our company's history.  A few years ago, higher fuel prices were a major threat to our total vehicle sales, whereas today, those higher prices have become far less of an issue."

Chrysler's February 2012 sales were 40% greater than in February 2011.  While the companies themselves are responsible for building attractive cars that are selling well, raising the fuel efficiency standard for cars in 2009 helped to change how Detroit looked at the fuel efficient car segment of the    
market and to prepare them for the era of high cost gasoline.

The February 2012 sales reached an annual rate of 15 million vehicles if sustained over a full year.  After the US auto market collapsed from 16 million vehicles to an annual sales rate of 9 million vehicles after the economic collapse of 2008, it may be even past half-time in Detroit.




Thursday, March 8, 2012

DOW 6547 On March 9, 2009: Lest We Forget

Three years ago tomorrow, on March 9, 2009, the Dow Jones Index hit bottom at a sickeningly low 6547 or 57% below its October 2007 high.  From that high, as the recession began in the 4th quarter of 2007, stocks moved lower.

Then shear fear and panic ruled the markets after September 15, 2008, following the Lehmann Brothers bankruptcy.  Read the CNN report after the market close on March 9, 2009.
http://money.cnn.com/2009/03/09/markets/markets_newyork/index.htm.

After March 9, 2009, stocks began their historic bull run, as the markets judged the federal government's actions had stopped another Great Depression.

I am harshly critical of what led to the Lehmann Brother's bankruptcy--allowing too-big-to-fail financial institutions to form, compounding that error by the failure to regulate debt leveraging and high risk practices at too-big-to-fail institutions so that Lehmann was leveraged more than 30 to 1 when it failed, the failure to regulate sub-prime lending, the failure to regulate the credit rating agencies, reckless deficits when the economy was growing from 2001 to 2007, and the list goes on.

But once Lehmann Brothers went bankrupt on September 15, 2008, and a financial meltdown began, as surely as an operating nuclear reactor melts without cooling water, both the out-going Bush Administration and the incoming-Obama Administration got more right than wrong.  Mistakes were made after Lehmann, but more tough calls made at that time look good rather than bad with the passage of time.

And so yesterday the Dow closed at 12,837 or up about 96% since March 9, 2009, an historic bull run.  Lest we forget.

Wednesday, March 7, 2012

Stunning Fact: Local Ordinances Ban Fracking In 27% of New York Marcellus Play

While the New York State government continues its process of promulgating rules to allow shale gas development, local ordinances in New York may have banned fracking in 27% of the New York area in the Marcellus.  I heard that number today at an International Energy Agency conference that I am attending and will be looking to confirm it.

Feds MOVE To Accelerate CNG Vehicle Adoption

Last week the Advanced Research Projects Agency-Energy (ARPA-E) held a massive conference in Oxton Hill, Maryland to which President Clinton, Secretary Chu and even I spoke.  More than 2500 people attended this premier event that marshals thought and action for energy technology breakthroughs. 

My pick for the most important highlight of the conference was the new Methane Opportunities for Vehicular Energy, a $30 million initiative, designed to hasten commercialization high energy density tanks for CNG and low-cost home refueling stations. http://www.ngvglobal.com/ and see the February 24th postings.

With gasoline at $3.74, while natural gas fueling is at $1.50, and war with Iran a real possibility, accelerating the move from oil to gas and other substitutes for transportation should be the nation's most important energy task.  The MOVE initiative seeks to do exactly that by finding energy storgage and fueling technology breakthroughs that lower the cost of CNG vehicles.

As of 2010, the US had just 112,000 CNG vehicles on the road. Using federal research dollars to tackle two of the biggest technology weaknesses in the CNG market is a smart use of funds that can play a role in putting millions of natural gas powered vehicles on our roads. MOVE plus passing the Natural Gas Act that is dying a long, slow death in the United States House of Representatives would really make the US serious about gas transportation.  

More PA Gas To Stay Local & Less For NY

Most PA gas leaves Pennsylvania and goes to New York City and other Northeast markets, meaning that the impact of gas drilling stays local, while the gas itself goes to the region.   A new $1 billion pipeline, proposed by UGI and its partners, could keep more gas local, by delivering another approximately 300 billion cubic feet per year or 25% of Pennsylvania's 2011 gas production to Pennsylvania"s homes and businesses. http://articles.philly.com/2012-03-02/news/31117210_1_pipeline-route-natural-gas-ugi

New York has been doing two things: buy shale gas drilled in Pennsylvania to save money and to stay warm, while stopping shale gas drilling in New York.

Of course, Pennsylvania has had the lease income, the royalty checks that have changed lives, the direct jobs, the indirect jobs, the much lower gas and electricity bills--lots of benefits from drilling that plenty of New Yorkers want as well. But dealing with the impacts caused by industrial gas drilling and then sending the gas to NY has left a bad taste in the mouths of more than a few Pennsylvanians.

Gas drilled in Pennsylvania should stay in Pennsylvania if possible.


Tuesday, March 6, 2012

Cornell Profs Smackdown Howarth For Second Time

The Cornell research team led by Professor Cathles just took Professor Howarth to the academic woodshed for a second time.  The most recent debunking of Howarth is full of data, and reading it is mandatory.

For me the single most important point in Cathles piece is the new data about leakage rates and specifically venting at 1578 unconventional gas wells.  Contrary to Howarth's assumption that venting during well completion takes place at 100% of uncoventional wells, the 1578 well data set showed 3% of wells were vented.

Cathles' latest paper further isolates Howarth who stands alone in the science literature.  Beyond the leakage rates that Howarth manufactures with wild assumptions and extrapolations, Howarth alone believes using a 20-year global warming potential factor when performing a coal and gas life cycle analysis is appropriate.

Howarth alone believes it is appropriate to end the life cycle analysis before coal and gas is combusted at an electricity plant.  Virtually all coal is used to make electricity.  It is impossible to calculate fairly the "life cycle" emissions of coal without including the emissions of when coal is actually burnt and that takes place nearly always at a power plant.  

But Howarth alone stops his analysis before coal is burnt. This point alone is enough to discredit entirely Howarth's analysis.

The deception in the Howarth analysis is not restricted to its failure to include emissions after coal and gas are used to make power.  Take a look at Cathles ending segment entitled, "Setting The Record Straight."  

Strong language will be found there like: "Their distortion of this statement is, once again, simply misleading and disingenuous."  That sentence is a good summary of Howarth's study.



President Obama Passes Political Beer Drinking Test

Its Super Tuesday and time to ask, with whom would you want to have a beer? President Obama, Speaker Gingrich, Governor Romney, Senator Santorum, or Congressman Paul?

In the February 27th, 2012 Politico Battleground poll, President Obama's job approval stood at 53% and 74% of voters approved of the President personally.  In other words 74% liked him, even though about a third of those who liked him did not approve of his job performance.

Personal popularity is everything when running for the president of a fraternity or a high school class, but it should not be discounted as a factor in Presidential politics. 

At the Presidential level, the question becomes, with which candidate would you prefer to have a beer? That is a question that President Obama welcomes, whether the Republican nominee is Romney, Santorum, Gingrich, or Paul.

How important is the Presidential beer drinking contest to deciding the winner?  While the economy and the question, "are you better off than 4 years ago?", remain the most important factor in deciding elections, Reagan, Clinton, and George W. Bush all won the beer drinking contest against George H. Bush, Dole, Kerry, Gore and the Presidency.  One might have to go back to Richard Nixon to find a candidate who became President without winning being liked.

Being liked matters in contests for the Presidency, probably even more than specific policy positions. Personal popularity involves personality, appearance, voice, all ingredients of leadership, whether one likes it or not.

Obama's 74% personal favoribility rating is teflon that deflects political attacks, and, while it won't win the President a second term by itself, his re-election campaign stands on the strong foundation that large numbers of Americans like Barack Obama.

Monday, March 5, 2012

McKibben Gets Fracking Facts Wrong In New York Review Of Books

It is not just Rolling Stones Magazine currently providing a buffet of misinformation about "fracking."

For the New York Review of Books, Bill McKibben writes about "fracking," while reviewing the excellent End of Country by Seamus McGraw (buy it and read it), another book, and Gasland.  http://www.nybooks.com/articles/archives/2012/mar/08/why-not-frack/.  Since McKibben substantially takes his facts from Gasland and the NYT Drilling Down Series that the NYT Public Editor twice rebuked as misleading and inaccurate, he makes big mistakes that inevitably distort his understanding of "fracking" and our energy choices.

For example, McKibben repeats the NYT claim that Pennsylvania's waters were contaminated with radionuclides.  Possibly because he is unaware of it, McKibben does not discuss the massive testing for radionuclides, done by both the Pennsylvania Department of Environmental Protection and 15 drinking water suppliers, that have all proven that Pennsylvania's streams and drinking water have no radionuclide contamination.  None. Zero.

If those test results are news to McKibben, he can thank the NYT that has avoided any significant reporting on the radiation test results that inconveniently refute its sensational original February 27th, 2011 story.  If he wants a taste of real information, McKibben should go to www.pgh20.com, where he will see the monthly results of radionuclide testing done by the Pittsburgh Water and Sewer Authority since March 2011. Again the PWSA testing is only a small part of the total testing done and all have the same results: no radionuclide contamination of in-stream or tap water. None. Zero.

McKibben also mistakenly asserts that the terrible Dunkard Creek fish kill in 2009 was the result of gas drilling discharges. That after all was what Gasland told McKibben and other viewers.  Yet, the EPA, the Pennsylvania Fish and Boat Commission, and the Pennsylvania Department of Environmental Protection all concluded that a coal mining discharge created the water conditions that allowed an algae to bloom that devastated fish populations.  Indeed, following the fish kill, the EPA entered into a consent agreement with a coal mining company to build a $70 million plant to treat a mining discharge a few miles upstream from the fish kill so that it would not be repeated.

Similarly distorted is McKibben's discussion of "lax Pennsylvania regulation" that he agains takes almost verbatim from the NYT Drilling Down Series.

Given his reliance on the NYT for facts, McKibben almost certainly is unaware that Pennsylvania issued the most violations--by a lot--to the gas industry (a total of 1200 in 2010 and 1100 in 2011) of any state in the country, as documented by the February 2012 University of Texas study that reviewed enforcement in 15 states.

He may be unaware that Pennsylvania more than doubled its oil and gas staff, hiring in 2009 and twice in 2010, boosting employee totals from 88 to 202, and opening new regulatory offices in Williamsport and Scranton in 2010.  No other state comes close to the hiring by Pennsylvania to oversee shale gas production, though still more is needed to keep pace with the industry expansion and record keeping needs.

McKibben may also be unaware that Pennsylvania passed 5 regulatory packages from 2008 to 2011 that modernized and strengthened regulations governing gas drilling.  Those packages are:

1. A water plan requirement governing water withdrawals enacted in 2008 to insure that water withdrawals do not damage streams;

2. A drilling wastewater disposal requirement enacted in August 2010 insuring that TDS levels in watersheds do not exceed 75% of the Safe Drinking Water Act TDS level and that required full TDS treatment at the pipe of any new or expanded drilling wastewater discharges.  At this point nearly all shale drilling wastewater is recycled or deep well injected, and none of it is being discharged to rivers.

3. A 150 feet buffer rule enacted in November 2010 that protects Pennsylvania's high quality streams that total 22,000 stream miles from all development.

4. A complete rewrite and strengthening of all gas well drilling rules, including design of the gas wells, materials used, and mandatory disclosure of chemicals.

5. Raising the fee as of 2009 charged drillers to apply for a permit from a ridiculous $100 to as much as $10,000 per application.  The fee raised more than $10 million per year and all funds were used to more than double the gas drilling staff at the Department of Environmental Protection.

Despite key errors, McKibben is not wrong about everything.  McKibben is right that the regulatory model of the regulator as a "partner" with industry is inconsistent with oversight.  Instead regulators must be professional and independent.  They must be neither friend nor foe to those that they regulate.

McKibben is also right that the gas industry must reduce methane leakage to limit greenhouse gas pollution, even though the science literature overwhelming concludes that coal emits twice the heat trapping pollution as gas does when used to make electricity, and nearly all coal is used to make electricity.  Though McKibben does not mention them, the EPA's July 2011 proposed regulations of gas drilling air emissions are crucial bit of 2012 regulatory business.

But gas drilling causes much less impact on water resources than coal mining, oil production, run-off from agriculture, sewage discharges, hydro dams, corn ethanol, antibiotic pollution, and many other things that damage water resources.  The most significant impact on water from shale drilling has been cases of gas migrating to private water wells, as a result of poor drilling (gas migration is not a result of hydraulic fracturing).  The Duke study that McKibben mentions found gas in water at high rates, but also found that frack fluids were not contaminating the same water wells, something that McKibben does not know or did not state in his piece.

The gas migration problem is real, and it is true that too many companies in the gas industry lawyer-up, when confronted with these cases, instead of fixing the problem, and focusing on reducing the risk.  The McKibben piece is another example to the industry of the damage being done by the current handling of this important issue.

McKibben is right that the federal government and states must strongly regulate gas drilling and reasonably tax it.    But McKibben must get the full facts about fracking, and he won't find them in the NYT, Gasland, or Rolling Stones Magazine.

Important to McKibben's mission of stabilizing concentrations of heat trapping pollution, the full facts include the role of low-priced gas, made possible by the shale gas boom, in preventing another wave of 150 new US coal plants that had been proposed as of 2005, and in the announcement of the retirment of 331 coal units since January 2010.  Moreover, so far, the boom in shale gas coincides with a boom in wind and solar in the USA, showing that gas and renewables need not be mutually exclusive.

McKibben's review proves that he needs to get beyond Gasland and the NYT Drilling Down Series.  I would be glad to discuss this vital issue with him if he would like.