Far too little attention is paid to the demand side of all energy markets. For sure, production has sizzle, but consumption is king. No demand means no production.
And so I was delighted to read Floyd Norris' must read piece in the NYT that does a great job of collecting in one piece many of the most important facts about the demand side of the global oil market.
www.nytimes.com/2012/11/24/business/economy/oil-supply-is-rising-but-demand-keeps-pace-and-then-some.html?_r=0.
I will pull out from Norris' piece just one fact, among many important ones, to highlight here.
The IEA in its 2012 World Energy Outlook projects that US oil consumption will decline by one-third by 2035. Or to put it another way, US oil consumption will decline on average by about 1% per year for the next 23 years. That is an astonishing fact.
Reducing US oil consumption and surging domestic oil consumption are putting the US on a path toward becoming oil independent and even a net exporter. Indeed, falling consumption and rising production are both equally strong factors in ending the decades of the US importing foreign oil.
But the only way for the USA to free itself from the global pricing of oil and oil price shocks to our economy is to use less oil. And so the reduction in US oil consumption is especially important and great news indeed!
Thursday, November 29, 2012
Ernst Young Rank CA, Colorado & TX Top 3 For Renewable Energy Investment: PA Falls Out Of Top 10
Renewable energy continues to boom around the USA and the world. Competition for billions of private investment to produce renewable energy is fierce. And so the Ernst Young ranking of states for their attractiveness for renewable energy brought good news to California, Colorado and Texas
www.ey.com/Publication/vwLUAssets/United_States_renewable_energy_attractiveness_indices/$FILE/United_States_renewable_energy_attractiveness_indices.pdf.
The EY rankings put California, Colorado, and Texas in the top 3 spots. They remain hotspots for investment, projects, jobs.
By contrast, Pennsylvania has now fallen out of the top 10, falling from 7 to 12. And unfortunately the Commonwealth is likely to fall further, as renewable energy investors steer clear.
www.ey.com/Publication/vwLUAssets/United_States_renewable_energy_attractiveness_indices/$FILE/United_States_renewable_energy_attractiveness_indices.pdf.
The EY rankings put California, Colorado, and Texas in the top 3 spots. They remain hotspots for investment, projects, jobs.
By contrast, Pennsylvania has now fallen out of the top 10, falling from 7 to 12. And unfortunately the Commonwealth is likely to fall further, as renewable energy investors steer clear.
Wednesday, November 28, 2012
Today I Announce My Candidacy For Governor of Pennsylvania
I announce today my candidacy for Governor of Pennsylvania and will be doing press conferences in Philadelphia and Harrisburg. Tomorrow, I will be in Pittsburgh for a press conference there.
Pennsylvania is an energy powerhouse and soon will produce the third most energy among the states. Pennsylvania will trail only Texas and Wyoming--two states with no state income tax--in total energy production.
Despite the Marcellus gas boom and falling national unemployment, Pennsylvania's economy is struggling. For the first time in years, Pennsylvania's unemployment rate was higher than the national unemployment rate in both September and October. Pennsylvania's rate of job creation that was among the highest in the nation in 2010 has fallen to among the lowest.
Our struggles are rooted in a mismanagement of Pennsylvania's tremendous energy resources, failed economic development policies that rely almost exclusively on the natural gas industry, and disastrous education policies. Pennsylvania's schools since 2011 have lost 19,000 jobs, and school taxes have increased in many communities, after a $1 billion cut in state funding in the 2011-2012 budget.
Those budget cuts to public schools, universities, and colleges were choices made and not unavoidable. For example, the 2011-12 state budget included hundreds of millions of dollars for the Rainy Day Fund, hundreds of millions of dollars for corporate tax cuts, and about $250 million to 14 cyber charter schools, even though 13 have reading and math scores below the average of a traditional public school.
Not surprisingly, with fewer teachers, higher class sizes, lost tutoring programs and courses, Pennsylvania's school test scores declined. Those Pennsylvanians who are also paying higher school taxes, as a result of the 2011-12 budget cuts, are paying more for education and getting less value.
In the coming campaign, I look forward to listening to Pennsylvanians and proposing solutions to our problems. I also invite you to visit www.hangerforgovernor.com and to support my campaign.
Pennsylvania is an energy powerhouse and soon will produce the third most energy among the states. Pennsylvania will trail only Texas and Wyoming--two states with no state income tax--in total energy production.
Despite the Marcellus gas boom and falling national unemployment, Pennsylvania's economy is struggling. For the first time in years, Pennsylvania's unemployment rate was higher than the national unemployment rate in both September and October. Pennsylvania's rate of job creation that was among the highest in the nation in 2010 has fallen to among the lowest.
Our struggles are rooted in a mismanagement of Pennsylvania's tremendous energy resources, failed economic development policies that rely almost exclusively on the natural gas industry, and disastrous education policies. Pennsylvania's schools since 2011 have lost 19,000 jobs, and school taxes have increased in many communities, after a $1 billion cut in state funding in the 2011-2012 budget.
Those budget cuts to public schools, universities, and colleges were choices made and not unavoidable. For example, the 2011-12 state budget included hundreds of millions of dollars for the Rainy Day Fund, hundreds of millions of dollars for corporate tax cuts, and about $250 million to 14 cyber charter schools, even though 13 have reading and math scores below the average of a traditional public school.
Not surprisingly, with fewer teachers, higher class sizes, lost tutoring programs and courses, Pennsylvania's school test scores declined. Those Pennsylvanians who are also paying higher school taxes, as a result of the 2011-12 budget cuts, are paying more for education and getting less value.
In the coming campaign, I look forward to listening to Pennsylvanians and proposing solutions to our problems. I also invite you to visit www.hangerforgovernor.com and to support my campaign.
Tuesday, November 27, 2012
Green Completions Cut Gas Drilling Pollution, Produce Revenue, And Are Becoming Common: EQT Leading The Way
Like all major energy sources, natural gas production is industrial activity that cannot be done with no impact on the environment. But again like all energy sources, natural gas's impacts vary depending on the practices and technology used to produce it.
A big step in reducing the impact of gas production and making gas cleaner are green completions. http://articles.philly.com/2012-11-25/business/35348948_1_natural-gas-shale-gas-completions. Indeed, progress in green completions is among the most important advances within the gas industry, and so it was good to see EQT and its embrace of green completions featured in the linked to story by Andy Maykuth.
Green completions matter, because they reduce air pollutants, including methane leaking into the atmosphere. Indeed, green completions cut substantially the amount of methane that leaks throughout the full gas production cycle, thereby increasing the climate advantages of gas, when compared to coal and oil.
Green completions also increase gas volumes and revenues for gas companies and so come close to paying for themselves. They are another example of good business and good environmental practice being the same.
Probably more than half of all gas wells in the USA are already green completed but that number will jump higher by 2015, when an EPA rule requiring broad use of the technology is scheduled to take effect. The EPA rule, however, is being challenged in court by industry that thinks the rule goes too far and environmentalists that think the rule does not go far enough.
Given the reality of those legal challenges to the EPA air rule and the uncertainty that they create, steps taken today by EQT and others to use more green completions are especially important.
A big step in reducing the impact of gas production and making gas cleaner are green completions. http://articles.philly.com/2012-11-25/business/35348948_1_natural-gas-shale-gas-completions. Indeed, progress in green completions is among the most important advances within the gas industry, and so it was good to see EQT and its embrace of green completions featured in the linked to story by Andy Maykuth.
Green completions matter, because they reduce air pollutants, including methane leaking into the atmosphere. Indeed, green completions cut substantially the amount of methane that leaks throughout the full gas production cycle, thereby increasing the climate advantages of gas, when compared to coal and oil.
Green completions also increase gas volumes and revenues for gas companies and so come close to paying for themselves. They are another example of good business and good environmental practice being the same.
Probably more than half of all gas wells in the USA are already green completed but that number will jump higher by 2015, when an EPA rule requiring broad use of the technology is scheduled to take effect. The EPA rule, however, is being challenged in court by industry that thinks the rule goes too far and environmentalists that think the rule does not go far enough.
Given the reality of those legal challenges to the EPA air rule and the uncertainty that they create, steps taken today by EQT and others to use more green completions are especially important.
Stunning Fact: Drought Lowers US 2012 GDP By Up To 1% As It Ravages 60% Of America
The worst drought since at least 1952 is ravaging 60% of America. The drought first is an environmental disaster but it is also hammering our national economy. America's 2012 GDP will be cut by up to 1% as a result of drought costs of $75 billion to $150 billion. Amazing numbers!
news.cincinnati.com/usatoday/article/1720851?odyssey=mod%7Cnewswell%7Ctext%7CFRONTPAGE%7Cs.
Indeed, though already high, the economic cost of the drought is mounting higher. For example, the drought has caused barge traffic on the Mississippi river to lighten loads substantially and may even close a 200 mile section of the Mississippi River in the coming months.
Drought costs could well be more than three times the huge $50 billion hit caused by Sandy. Sandy and the epic drought are quite a one-two punch to economic growth.
None of this damaging, expensive weather surprises the climate models Those models years ago predicted rising sea levels, super storms as well as droughts in much of the area where the current drought is severest.
news.cincinnati.com/usatoday/article/1720851?odyssey=mod%7Cnewswell%7Ctext%7CFRONTPAGE%7Cs.
Indeed, though already high, the economic cost of the drought is mounting higher. For example, the drought has caused barge traffic on the Mississippi river to lighten loads substantially and may even close a 200 mile section of the Mississippi River in the coming months.
Drought costs could well be more than three times the huge $50 billion hit caused by Sandy. Sandy and the epic drought are quite a one-two punch to economic growth.
None of this damaging, expensive weather surprises the climate models Those models years ago predicted rising sea levels, super storms as well as droughts in much of the area where the current drought is severest.
Monday, November 26, 2012
Debunking Latest Attacks On Shale Gas As Bubble/Ponzi Scheme & Systemic Threat To Economy
Shale gas production for nearly a dozen years. A massive shale gas boom for now 5 years or since 2008. Record US natural gas production that crashed prices to below $2 for a thousand cubic feet.
Nothing stops the vampire like quality of attacks portraying the shale gas resource as soon to run out, as a bubble ready to pop, or a ponzi scheme. Here is the link to one of the latest:
http://www.desmogblog.com/2012/11/13/shale-sas-bubble-about-to-burst-say-energy-insiders-art-berman-bill-powers. Indeed, Bill Powers is promoting a book to be published in May, 2013 theorizing that the shale gas resource will last just 5 to 7 years more. Mind you such forecasts of impending shale gas supply doom are already about 3 years old, and soon US shale gas production will enter its 13th year.
Powers and Art Berman, who has done more than anyone to assert that the shale gas resource will soon collapse, also state that the economy faces cataclysm, like the financial catastrophe of 2008, when the shale gas resource is soon exhausted. This comparison of the shale gas industry to the US financial system is, however, absurd.
The industry has no too big to fail problem. Indeed, with about 60 different companies holding drilling permits in just Pennsylvania, the gas industry features a lack of concentration and has traits opposite of too big to fail.
Moreover, the gas industry is not the equivalent of a basic, economic infrastructure, unlike the banking system that is. Economic life goes on through gas booms and busts, while a financial collapse brings all commerce crashing down.
By pointing to the 2008 financial collapse and suggesting that shale gas is another round of such disaster, Berman and Powers engage in fear mongering and attention seeking behavior.
Tellingly, the recent pull back in dry gas production in the US, of course, results from the opposite of an emerging gas supply shortage. Instead, a very real gas supply glut crashed the price and caused rigs to redeploy to oil and wet gas.
But as some rigs went to more profitable opportunities, the gas in the ground stayed put, where it will be, when the gas rigs return. And return they will, once gas prices move to $4 to $6 per thousand cubic feet range. And there is conservatively 20 years of shale gas to be produced within that price range.
Moreover, were the US price to go above $6--hardly a high price, when today Europe and Asia pay $10 to $16 for natural gas-- the available shale gas supply certainly totals many decades more.
Nothing stops the vampire like quality of attacks portraying the shale gas resource as soon to run out, as a bubble ready to pop, or a ponzi scheme. Here is the link to one of the latest:
http://www.desmogblog.com/2012/11/13/shale-sas-bubble-about-to-burst-say-energy-insiders-art-berman-bill-powers. Indeed, Bill Powers is promoting a book to be published in May, 2013 theorizing that the shale gas resource will last just 5 to 7 years more. Mind you such forecasts of impending shale gas supply doom are already about 3 years old, and soon US shale gas production will enter its 13th year.
Powers and Art Berman, who has done more than anyone to assert that the shale gas resource will soon collapse, also state that the economy faces cataclysm, like the financial catastrophe of 2008, when the shale gas resource is soon exhausted. This comparison of the shale gas industry to the US financial system is, however, absurd.
The industry has no too big to fail problem. Indeed, with about 60 different companies holding drilling permits in just Pennsylvania, the gas industry features a lack of concentration and has traits opposite of too big to fail.
Moreover, the gas industry is not the equivalent of a basic, economic infrastructure, unlike the banking system that is. Economic life goes on through gas booms and busts, while a financial collapse brings all commerce crashing down.
By pointing to the 2008 financial collapse and suggesting that shale gas is another round of such disaster, Berman and Powers engage in fear mongering and attention seeking behavior.
Tellingly, the recent pull back in dry gas production in the US, of course, results from the opposite of an emerging gas supply shortage. Instead, a very real gas supply glut crashed the price and caused rigs to redeploy to oil and wet gas.
But as some rigs went to more profitable opportunities, the gas in the ground stayed put, where it will be, when the gas rigs return. And return they will, once gas prices move to $4 to $6 per thousand cubic feet range. And there is conservatively 20 years of shale gas to be produced within that price range.
Moreover, were the US price to go above $6--hardly a high price, when today Europe and Asia pay $10 to $16 for natural gas-- the available shale gas supply certainly totals many decades more.
Continuing Vote Count in 37 States Reveals Major Romney Strategic Blunder--Foregoing Full Campaign In Pennsylvania
Amazingly, 20 days after the election, 37 states are still counting votes, according to Nate Silver.
fivethirtyeight.blogs.nytimes.com/2012/11/23/pennsylvania-could-be-a-path-forward-for-g-o-p/. And as the votes get counted, President Obama's lead grows, reaching now 3.3%, while Governor Romney's share falls to about 47.5%. Silver writes that currently 127 million votes have been counted in 2012 or 4 million less than the 131 million final vote tally in 2012.
As the votes come in, Pennsylvania is what Silver calls the "tipping point state," the state that supplied the President with the 270th electoral vote, when states are ranked from most Democratic to least Democratic.
Indeed, the President's margin in Colorado, that was the tipping point state at one point in the vote count, has now reached 5.5% or higher than his margin in Pennsylvania.
Pennsylvania is accustomed to being near the center of the political universe, a state that attracts an all out effort by both major political parties to carry it in the Presidential race. But that was not the case in 2012. Romney made a last gasp grab for Pennsylvania's 20 electoral votes, but the Romney campaign and his allied Super Pacs gave up on the state for most of the fall campaign, to the frustration of state Republican leaders.
Yet, Silver's analysis and the current vote count confirm Pennsylvania's GOP leaders really did know better. The Romney decision to forego a full campaign in Pennsylvania, and instead pour resources into the supposedly greener and more important political pastures of Colorado, Iowa, and Wisconsin, was a major strategic blunder.
To be clear, the mistake did not cost Governor Romney the election, and he may not have won Pennsylvania had he focused on it. Yet, Romney needed Pennsylvania more than any other state--that is what tipping point status means--and not to compete fully here was a blunder indeed.
Finally, for Pennsylvania's Democrats, Romney's blunder was most welcome, for it probably did decisively benefit Democratic candidates in some statewide, state senate, and state house races throughout the Commonwealth.
fivethirtyeight.blogs.nytimes.com/2012/11/23/pennsylvania-could-be-a-path-forward-for-g-o-p/. And as the votes get counted, President Obama's lead grows, reaching now 3.3%, while Governor Romney's share falls to about 47.5%. Silver writes that currently 127 million votes have been counted in 2012 or 4 million less than the 131 million final vote tally in 2012.
As the votes come in, Pennsylvania is what Silver calls the "tipping point state," the state that supplied the President with the 270th electoral vote, when states are ranked from most Democratic to least Democratic.
Indeed, the President's margin in Colorado, that was the tipping point state at one point in the vote count, has now reached 5.5% or higher than his margin in Pennsylvania.
Pennsylvania is accustomed to being near the center of the political universe, a state that attracts an all out effort by both major political parties to carry it in the Presidential race. But that was not the case in 2012. Romney made a last gasp grab for Pennsylvania's 20 electoral votes, but the Romney campaign and his allied Super Pacs gave up on the state for most of the fall campaign, to the frustration of state Republican leaders.
Yet, Silver's analysis and the current vote count confirm Pennsylvania's GOP leaders really did know better. The Romney decision to forego a full campaign in Pennsylvania, and instead pour resources into the supposedly greener and more important political pastures of Colorado, Iowa, and Wisconsin, was a major strategic blunder.
To be clear, the mistake did not cost Governor Romney the election, and he may not have won Pennsylvania had he focused on it. Yet, Romney needed Pennsylvania more than any other state--that is what tipping point status means--and not to compete fully here was a blunder indeed.
Finally, for Pennsylvania's Democrats, Romney's blunder was most welcome, for it probably did decisively benefit Democratic candidates in some statewide, state senate, and state house races throughout the Commonwealth.
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