Disappointing results from an initial rank wildcat can’t kill a play.
The cyclical ups and downs of product prices can’t kill a play.
High operating costs can’t kill a play.
Only massively incompetent government can kill a play.
“This is a clearly disappointing exploration outcome,” Marvin Odum, director of Shell’s Upstream Americas unit, said in a statement. While indications of oil and gas were present in the Burger J well in Alaska’s Chukchi Sea, they weren’t sufficient to warrant further exploration, the company said. Shell will now plug and abandon the well.
Shell had planned a two-year drilling program starting this July. The company was seeking to resume work halted in 2012 when its main drilling rig ran aground and was lost. It was also fined for air pollution breaches. The Anglo-Dutch company first discovered oil and gas in the region in the late 1980s.
The company continues to see potential in the region and the decision not to explore further in Alaskan waters “reflects both the Burger J well result, the high costs associated with the project, and the challenging and unpredictable federal regulatory environment in offshore Alaska,” according to the statement.
The potential of the Alaska OCS is nearly as large as the Central Gulf of Mexico…
Product prices and exploration results are by their nature, unpredictable. Operating costs are tied to product prices and regulatory requirements. Regulatory requirements must be predictable in order for any business to function.
Global steel production is dependent on coal. 70% of the steel produced today uses coal. Metallurgical coal – or coking coal – is a vital ingredient in the steel making process. World crude steel production was 1.4 billion tonnes in 2010. Around 721 million tonnes of coking coal was used in the production of steel.
721 million tons of coal per 1,400 million tons of steel. Let’s just say 1 ton of coal per ton of steel.
1 MW of wind turbine capacity requires 230 tons of coal for the steel.
Coal is used as an energy source in cement production. Large amounts of energy are required to produce cement. It takes about 200 kg of coal to produce one tonne of cement and about 300-400 kg of cement is needed to produce one cubic meter of concrete (World Business Council for Sustainable Development, 2002).
200 kg of coal per tonne of cement, 350 kg cement per 1 m^3 of concrete–> 70 kg (0.07 MT) of coal per 1 m^3 of concrete.
1 MW of wind turbine capacity requires 61 tonnes of coal for the concrete.
1 ton is close enough to 1 tonne (MT) to not worry about a conversion… We’re ballparking here.
That’s 291 tons of coal per MW of wind turbine installed capacity.
Now a coal-fired plant has a capacity factor of ~87% and a typical wind turbine only manages ~25%. So it takes about 3.5 MW of wind power to generate as much electricity as 1 MW of coal power, assuming the wind blows.
So, it takes about 1,020 tons of coal to offset 1 MW of coal-fired capacity with 1 MW of wind capacity.
1,020 tons of coal would have generated 1.9 million kWh of electricity.
1 MW of wind capacity would take 10 months to generate 1.9 million kWh of electricity.
The cost of each taxpayer-financed green energy job created since 2009:
$26.32 billion divided by 2,298 jobs = $11.45 million per job…
Green energy jobs and DOE loans are tallied under programs 1703 and 1705 on this list.
Permanent jobs created: 2,298
Taxpayer financed loan guarantees: $26.33 billion
19 of the projects cost more than $10 million per permanent job…
Even if you use the Obama maldaministration’s accounting methods and include temporary employment, the totally idiotic “jobs created/saved” category and include the 33,000 Ford Motor Company jobs “saved”, you get ~60,000 jobs at a cost of $34.5 billion –> $580,000 per job.
Bear in mind that Mr. Obama promised “to create 5 million jobs over 10 years by directing taxpayer funds toward renewable energy projects.” He’s currently 4,997,702 short of the 5 million mark.
The Full Cost of “Green Energy” Jobs
I have handy cost estimates for three of the solar plants near the top of the list of $10 million-plus jobs. If I factor in the increased cost of electricity, the cost per permanent job literally skyrockets, as promised by candidate Obama in 2008.
I generously assumed that the three solar PV plants could achieve a 30% capacity factor (the average is 25%), that they could achieve a levelized generation cost (LCOE) of $144.30 per MWh (DOE’s most recent average for plants coming online in 2018) and that they could remain in service for 20 years.
The total cost to the economy per permanent “green energy” job created by these three solar PV plants is $82.3 million. If I add in the 2,450 temporary construction jobs that were created, the cost per job drops to $2.8 million per job.
The Carbon-Free Benefits of Green Energy
The carbon-free “benefit” is a 0.007% reduction in annual global carbon emissions, relative to coal (0.00035% relative to natural gas). Neither the climate nor the oceans will notice this “benefit.”
Each MW of coal generation displaced by solar PV reduces global carbon emissions by about 0.000008% and doubles (or more) the cost of electricity. Natural gas would achieve half the carbon emission reduction at about 1/3 the cost of solar and a slightly lower cost than coal.
Of course, nuclear would solve the whole problem… But it’s frowned upon by greenies.
The Irony is priceless…
According to the EPA, coal yields 2,249 lbs/MWh of carbon dioxide per MWh of electricity generated. That works out to 1.02 metric tons of CO2 per MWh of generation.
In 2011, 1.8 million MWh (1.8 TWh) of electricity were generated in these United States by solar power plants. Assuming this generation displaced coal, 1.87 million metric tons of CO2 emissions were averted.
That’s a lot! Right?
Well, no it is not a lot. 1.87 million tons of CO2 emissions is barely a rounding error compared to total global carbon emissions.
1.87 million tons of CO2 is 0.51 million tons of carbon. According to CDIAC, the total global carbon emissions in 2011 were 9,471.37 million tons of carbon.
9,471.37 – 0.51 = 9,470.86
The minuend and difference both round to 9,471 million tons of carbon.
9,471 million tons of carbon is 9.5 Gt of carbon. Natural carbon sources emit 190 to 225 Gt per year…
Anthropogenic emissions account for only 4-5% of the total carbon budget. 1.8 TWh of US solar generation in 2011 reduced the 4-5% component by 0.005%.
This would be funny if it didn’t cost so much money.
In 2011 there was 4,389 MW of solar PV installed capacity in these United States. At $6 million per MW, the total cost for those solar plants was ~$26.3 billion. Had that money been spent on natural gas-fired plants (~$900,000 per MW), it could have displaced 29,260 MW of coal-fired capacity. This would have generated 223 TWh of electricity (solar only yielded 1.8 TWh. Natural gas yields about half the carbon emissions as coal. If 223 TWh of coal-fired generation had been displaced by natural gas, it would have reduced global carbon emissions by ~56 metric tons (solar only reduced it by 0.51 metric tons).
Here’s a “what if” comparison:
Black = What if solar did not displace coal-fired plants.
Green = Actual solar generation and actual emissions.
Red = What if the money spent on solar had been spent on natural gas-fired plants.
Of course, since CO2 is not a real pollutant, only the cost matters… But it is funny – Natural gas would be a far more effective weapon than solar for tilting at AGW windmills…
The vast majority of the Green River Oil Shale of the Piceance Basin is under Federal control and largely unavailable for meaningful exploitation efforts. Only a fraction of these leases are open, and then only for RD&D…
Secretary Salazar Finalizes Plan Promoting Responsible Oil Shale and Tar Sands Research, Demonstration and Development
——————————————————————————–
BLM proposes revisions to commercial oil shale regulations to ensure fair return to taxpayer; will open 60-day public comment period
WASHINGTON – As part of President Obama’s strategy to continue to expand safe and responsible development of the nation’s energy resources, Secretary of the Interior Ken Salazar today announced the Department’s final plan for encouraging research, development and demonstration (RD&D) of oil shale and tar sands resources on Bureau of Land Management (BLM) lands in Colorado, Utah and Wyoming.
The Record of Decision and plan amendments make nearly 700,000 acres in Colorado, Utah and Wyoming available for potential oil shale leasing and about 130,000 acres available for potential tar sands leasing in Utah. In November 2012, the BLM signed two additional leases for RD&D oil shale proposals to encourage industry to develop and test technologies aimed at developing oil shale resources on a commercial scale.
“This plan maintains a strong focus on research and development to promote new technologies that may eventually lead to safe and responsible commercial development of these domestic energy resources,” Secretary Salazar said. “It will help ensure that we acquire critically important information about these technologies and their potential effects on the landscape, especially our scarce water resources in the West.”
As part of the Obama Administration’s all-of-the-above energy strategy, domestic oil and gas production has grown each year the President has been in office, with domestic oil production currently higher than any time in two decades and natural gas production at its highest level ever.
“As part of the Obama Administration’s all-of-the-above energy strategy, domestic oil and gas production has grown each year the President has been in office…”
The rise is U.S. domestic oil and gas production over the last decade is not any “part of the Obama Administration’s all-of-the-above energy strategy.”
The Maobama Maladministration has played no role whatsoever in that rise in oil and natural gas production, none, nada, zip…
The only portion of U.S. domestic oil and gas production that is in any way part of Dear Leader Chairman Maobama’s all-of-the-above energy strategy is that from Federal mineral leases. Oil and natural gas production from Federal leases has been declining since at least 2010.
Leasing is down because most of the lease sales since 2010 were cancelled. Permits that used to take 30-60 days to approve, now take 6-24 months. The most recent sale, held last Wednesday, was one of the weakest Central Gulf of Mexico Lease Sales in history. OCS 227 was the weakest Central Gulf sale in at least 10 years. It was weaker than the March 2009 sale in the aftermath of the financial crash, oil & gas price collapse and Hurricane Ike.
Now for the energy idiocy…
“Secretary of the Interior Ken Salazar today announced the Department’s final plan for encouraging research, development and demonstration (RD&D) of oil shale and tar sands resources on Bureau of Land Management (BLM) lands in Colorado, Utah and Wyoming.”
RD&D??? Good effing grief!!! Boot Salazar is perhaps the only person on the face of the Earth with less competence in energy economics than Al Gore.
They continue to keep the potentially most prolific undeveloped hydrocarbon resource potential in the U.S (possibly the world) off limits to actual exploitation, while they p!$$ away hundreds of billions of taxpayer dollars actually building solar, offshore wind and biofuels infrastructure that will cost energy consumers far more money for far less reliable sources of electricity and transportation fuels…
The USGS estimates that the Green River Oil Shale of the Piceance Basin contains more than 1 trillion barrels of ***recoverable*** oil.
The vast majority of this play is under Federal control and largely unavailable for meaningful exploitation efforts. Maobama & Boot actually rescinded the Bush administration decision to open this area up to actual exploitation prior to closing it off and then reopening some of the acreage to RD&D.
The Green River Oil Shale in just the Piceance Basin of Colorado contains more than 1 trillion barrels of recoverable oil (kerogen).
The kerogen is a waxy precursor of oil. It was long thought that mining was the only way to recover it. Shell recently demonstrated that the kerogen can be economically produced without having to mine it. Unlike all of the green schist foisted on the taxpayers by Enviromarxists, this play is both technically and economically exploitable now.
Just imagine what would happen if the Federal gov’t wasn’t doing everything in its power (actually beyond its lawful powers) to impede domestic oil production…
In my hypothetical production forecast, I projected Green River oil shale production to reach 15 million BOPD by 2096. Am I being overly optimistic in projecting more than 15 million barrels per day (BOPD) of production from oil shales by 2100? Shell estimates that they could be producing 500,000 barrels per day from the Picenance Basin with a very small footprint using an in situ recovery process…
Shell has tested its in-situ process at a very small scale on Shell’s private holdings in the Piceance Basin. The energy yield of the extracted liquid and gas is equal to that predicted by the standardized assay test.13 The heating energy required for this process equals about one-sixth the energy value of the extracted product. These tests have indicated that the process may be technically and economically viable.
This approach requires no subsurface mining and thus may be capable of achieving high resource recovery in the deepest and thickest portions of the U.S. oil shale resource. Most important, the Shell in-situ process can be implemented without the massive disturbance to land that would be caused by the only other method capable of high energy/resource recovery—namely, deep surface mining combined with surface retorting. The footprint of this approach is exceptionally small. When applied to the thickest oil shale deposits of the Piceance Basin, drilling in about 150 acres per year could support sustained production of a half-million barrels of oil per day and 500 billion cubic feet per year of natural gas.
[…]
Once oil shale development reaches the production growth stage, how fast and how large the industry grows will depend on the economic competitiveness of shale derived oil with other liquid fuels and on how the issues raised in Chapter Five are ultimately resolved. If long lead-time activities are started in the prior stage, the first follow-on commercial operations could begin production within four years. Counting from the start of the production growth stage and assuming that 200,000 barrels per day of increased production capacity can be added each year, total production would reach 1 million barrels per day in seven years, 2 million barrels per day in 12 years, and 3 million barrels in 17 years.
Assuming a 12-yr lead time to reach the production growth stage, it will take ~30 years to reach 3 million barrels per day. If production continued to grow at a rate of 1 million BOPD every 5 years… Oil shale production from just the Piceance Basin could reach 15 million BOPD by the end of this century.
The hydrocarbon characteristics of the the oil shales of the Green River formation in the Piceance Basin are superior to those of the Athabasca oil sands. The hydrocarbon areal density is about 13 times that of the Athabasca deposits. The Green River hydrocarbons are not technically “oil;” it’s a form of kerogen. But, for or refining purposes, it’s oil. It will be booked as oil, just like the Athabasca tar sand oil is. It’s a high-grade refinery feedstock…
Canadians are currently producing ~ 1 million barrels of oil per day from Athabasca oil sand deposits. They expect to increase that to 2 million barrels per day over the next decade. The Green River oil shale deposits in the Piceance basin could easily outperform Athabasca within a decade and with a much smaller environmental footprint.
Athabasca oil sands are currently economically competitive with the OPEC basket. Green River formation oil shales are superior, by a wide margin, to Athabasca oil sands. The Green River oil shales would yield 100,000 bbl of 38° API sweet refinery feed per 160,000 tons of ore & overburden. Athabasca oil sands yield 100,000 bbl of 34° sweet refinery feed per 430,000 tons of ore & overburden. The unconventional oil is actually very light and very sweet; the OPEC Basket is actually heavier (32.7° API).
Athabasca is economically competitive now. Green River could be economically competitive now. The only obstacles to US energy security are environmental terrorists and the U.S. government.
“Peak Oil,” if it exists, won’t be reached for hundreds of years if the U.S. government would just get out of the way. About 80% of the most prospective Green River deposits are under Federal leases. The Obama administration effectively blocked exploitation of the Green River oil shale last year.
Offshore Wind Passes in Senate, Gov. O’Malley’s Signature Next
The construction of a wind power farm off the coast of Ocean City could begin as early at 2017
By Jessica Wilde, Capital News Service
Gov. Martin O’Malley’s offshore wind energy bill is on its way to his desk for a signature, having passed in the House in February and in the Senate on Friday.
Five friendly Senate amendments are expected to be approved easily by the House.
The new legislation will funnel $1.7 billion of ratepayer subsidies over a 20-year period toward the construction of a wind power farm 10 to 30 miles off the coast of Ocean City as early as 2017.
“It’s about a better Maryland for tomorrow,” said Sen. James Mathias Jr., D-Worcester, the former mayor of Ocean City, who changed his vote to support the bill.
O’Malley’s previous two attempts to push the legislation—the first more ambitious —never made it to the Senate floor largely because of concerns about the cost to Marylanders.
His first initiative also failed because utility companies would have had to make nearly 20-year commitments to buy offshore wind energy.
Offshore wind is, by far, the most expensive source of electricity. An offshore wind farm would have to receive 34¢/kWh, wholesale, just to break even over a typical 30-yr plant lifetime. 34¢/kWh is almost three times the average retail residential electricity rate in the U.S.
“We produce more oil at home than we have in 15 years.”
–President Obama, Feb. 12, 2013
Mr. President, we do produce more oil at home than we have in quite a long time. We could actually be producing a lot more than we currently are. See that decline in Federal Gulf of Mexico production from ~1.7 MMbbl/d to ~1.4 MMbbl/d since early 2010? You actually did build that.
It’s no secret in the oil patch that the recent increase in U.S. domestic oil production has occurred almost entirely on State and privately owned mineral leases in Texas and North Dakota and that production from Federal leases has been declining for most of the last four years.
The Congressional Research Service noticed the same pattern…
U.S. Crude Oil and Natural Gas Production in Federal and Non-Federal Areas
Marc Humphries
Specialist in Energy Policy
February 28, 2013
Summary
In 2012, oil prices ranged from $80 to $110 per barrel (West Texas Intermediate spot price) and remain high in early 2013. Congress is faced with proposals designed to increase domestic energy supply, enhance security, and/or amend the requirements of environmental statutes. A key
question in this discussion is how much oil and gas is produced each year and how much of that comes from federal and non-federal areas. On non-federal lands, there were modest fluctuations in oil production from fiscal years (FY) 2008-2010, then a significant increase from FY2010 to FY2012 increasing total U.S. oil production by about 1.1 million barrels per day over FY2007 production levels. All of the increase from FY2007 to FY2012 took place on non-federal lands, and the federal share of total U.S. crude oil production fell by about seven percentage points.
Natural gas prices, on the other hand, have remained low for the past several years, allowing gas to become much more competitive with coal for power generation. The shale gas boom has resulted in rising supplies of natural gas. Overall, U.S. natural gas production rose by four trillion cubic feet (tcf) or 20% since 2007, while production on federal lands (onshore and offshore) fell by about 33% and production on non-federal lands grew by 40%. The big shale gas plays are primarily on non-federal lands and are attracting a significant portion of investment for natural gas development.
[…]
Despite the new timeline for review, it took an average of 307 days for all parties to process (approve or deny) an APD in 2011, up from an average of 218 days in 2006.14 The difference however, is that in 2006 it took the BLM an average of 127 days to process an APD, while in 2011 it took BLM 71 days. In 2006, the industry took an average of 91 days to complete an APD, but in 2011, the industry took 236 days. Thus, since 2006, it took the BLM 56 fewer days to process APDs, while it took the industry 145 days longer to submit a completed application.15The BLM stated in its FY2012 and FY2013 budget justifications that overall processing times per APD have increased because of the complexity of the process.
Some critics of this lengthy timeframe highlight the relatively speedy process for permit processing on private lands. However, crude oil development on federal lands takes place in a wholly different regulatory framework than that of oil development on private lands.16State agencies permit drilling activity on private lands within their state, with some approving permits within ten business days of submission.
The permit delays cited by the CRS were just for the BLM (onshore) APD’s (applications for permits to drill). The CRS report did not discuss the even longer offshore delays. POE (Plan of Exploration) or DOCD (Development Operations Coordination Document) applications have to be submitted and approved before the APD. These plan documents used to be reviewed and approved in 30-60 days. Currently, the BOEMRE is taking 180 to more than 300 days to approve POE’s and DOCD’s. Quite often, the BOEMRE will even not “deem” the plan to have been received for more than 30 days. Then it can be another 30-60 days before they let the operator know if the plan is sufficiently completed for review. The 300,000 barrel per day decline can be laid squarely on the unlawful drilling moratorium in the Gulf of Mexico (yes, it was unlawful) and the subsequent “permitorium.” Back in 2007, Gulf of Mexico production was expected to reach 1.8 million bbl/day by 2013, largely on the back of the Lower Tertiary play…
This production was delayed by the moratorium and permitorium. The first field, Cascade/Chinook, has only just recently come on production. Several more fields should come on-line within the next year or two. So the Gulf may actually hit that 1.8 million bbl/day mark before the end of this decade.
In an era of high oil prices and increasing natural gas demand for power generation, it is simply insane that oil & gas production from Federal leases has been declining for most of the last four years…
It’s even more insane for this to be happening at a time when the Federal government claims that it desperately needs more revenue.
The CBO estimates that the full opening of the Outer Continental Shelf (OCS) and ANWR Area 1002 to exploration and production would quickly generate more than $35 billion per year in Federal revenue from lease bonuses and royalties…
On top of that, the BEA estimates that it would also generate more than $24 billion per year in Federal tax revenue…
That’s about $60 billion per year.
Simply allowing oil and gas companies to do their jobs could more than offset all of the real sequestration cuts (~$44 billion per year) without raising taxes on anyone.
No… It’s Not the Geology!
Climate Progress and other green activists seem to be blaming geology for the decline in oil production under Federal lands. They must think that organic-rich shale deposition somehow managed to avoid Federal lands…
The shale plays have nothing to do with the decline in oil production from Federal leases. This is not an “either, or” thing. The increase in oil production from shale plays on non-Federal leases is not causing the decline in production from Federal leases.
The decline is entirely due to the drop in Gulf of Mexico production and this decline is entirely due to the moratorium and subsequent permitorium. As recently as 2010, before Macondo and the moratorium, the MMS was forecasting 1.8 million bbl/d from the Gulf by 2013…
Without the moratorium and permitorium, Gulf of Mexico oil production would likely be about 400,000 bbl/d more than it currently is. Possibly even higher, because production was recovering very quickly after the September 2009 economic crash and Hurricane Ike. While it is true that only about 10% of the current shale oil plays are being exploited on Federal lands, half of the shale gas plays in the Western U.S. are under Federally controlled lands.
Beyond that, the hydrocarbon potential under unavailable Federal lands and waters dwarfs the non-Federal shale plays. The undiscovered technically recoverable resource potential of the lower-48 OCS (Eastern Gulf of Mexico, Atlantic and Pacific), ANWR Area 1002 and other unavailable onshore Federal leases exceeds the discovered technically recoverable resource potential of the active shale oil plays by nearly 50%…
Also, the assertion that Federal leases only cover 10% of the shale oil plays misses the potential “mother-of-all” shale plays: The Green River Oil Shale of the Piceance Basin.
The vast majority of this play is under Federal control and largely unavailable for meaningful exploitation efforts…
While not a conventional oil play, the Green River Oil Shale is now technically and economically exploitable. Last fall the Interior Department announced that it would close off another 1.6 million acres to oil shale development. As it currently stands, very little of this acreage is available for leasing and then only for R&D purposes.
I didn’t even include the Alaska OCS. If I did, you could add another 25-30 billion barrels to the resource potential under Federal control. Although Shell’s difficulties in their first drilling season in the Beaufort and Chukchi seas indicate that global warming has yet to melt enough ice or sufficiently shorten Arctic winters enough to make this a near-term high-impact play.
Summary
The Federal government is the direct cause of U.S. domestic crude oil production being 800,000 to 1.3 million barrels per day lower than it currently is:
Gulf of Mexico: 400,000 bbls/d shortfall due to the ongoing permitorium and more difficult lease terms.
ANWR: 400,000 bbls/d shortfall due to failure to open Area 1002 in a timely manner.
Green River Oil Shale: 500,000 bbls/d shortfall due to failure to effectively open Federal leases for exploitation.
There are no geological reasons for this production shortfall. Apart from the Green River oil shale, there are there no real engineering or logistical obstacles either and those obstacles could be easily overcome if the area were truly open to exploitation.
Last Friday, at 3:40 p.m., the State Department released its “Draft Supplemental Environmental Impact Statement” for the highly contentious Keystone XL pipeline, which Canada hopes to build to move its tar sands oil to refineries in the United States. In effect, the statement said there were no environmental impediments that would prevent President Obama from approving the pipeline.
Two hours and 20 minutes later, I received a blast e-mail containing a statement by James Hansen, the head of the Goddard Institute for Space Studies at NASA — i.e., NASA’s chief climate scientist. “Keystone XL, if the public were to allow our well-oiled government to shepherd it into existence, would be the first step down the wrong road, perpetuating our addiction to dirty fossil fuels, moving to ever dirtier ones,” it began. After claiming that the carbon in the tar sands “exceeds that in all oil burned in human history,” Hansen’s statement concluded: “The public must demand that the government begin serving the public’s interest, not the fossil fuel industry’s interest.”
As a private citizen, Hansen, 71, has the same First Amendment rights as everyone else. He can publicly oppose the Keystone XL pipeline if he so chooses, just as he can be as politically active as he wants to be in the anti-Keystone movement, and even be arrested during protests, something he managed to do recently in front of the White House.
But the blast e-mail didn’t come from James Hansen, private citizen. It specifically identified Hansen as the head of the Goddard Institute…
[…]
Yet what people hear from Hansen today is not so much his science but his broad, unscientific views on, say, the evils of oil companies.
[…]
For a midlevel scientist at the Goddard Institute, what signal is Hansen sending when he takes the day off to get arrested at the White House? Do his colleagues feel unfettered in their own work? There is, in fact, enormous resentment toward Hansen inside NASA, where many officials feel that their solid, analytical work on climate science is being lost in what many of them describe as “the Hansen sideshow.”
Hansen should be fired and prosecuted for misusing his office and title as a NASA director in an effort to push his political agenda (the Hatch Act).
The Hatch Act grew out of nineteenth-century concerns about the political activities of federal employees. As early as 1801, President Thomas Jefferson issued an Executive Order that said federal workers should neither “influence the votes of others, nor take part in the business of electioneering.” He saw such activities as “inconsistent with the spirit of the Constitution.” Jefferson was primarily concerned with what government employees did while in office; subsequently, concerns developed in another area. Throughout the nineteenth century, appointments to the federal bureaucracy were viewed as the natural spoils of political success. The prevalent awarding of jobs for political loyalty created a so-called spoils system and, ultimately, a reaction against it.
During his State of the Union Address, President Obama had a few things to say about energy snd I have a few replies.
Pres. Obama: We buy… less foreign oil than we have in 20 [years].
Wrong!!! We buy more “foreign oil” now than we did 20 years ago.
Monthly crude oil imports (thousands of barrels per day) are about 33% higher now than they were 20 years ago (Source: U.S. Energy Information Administration).
Pres. Obama: We produce more oil at home than we have in 15 years.
What do you mean by “we”? You don’t produce any oil.
See that decline in Federal Gulf of Mexico production from ~1.7 MMbbl/d to ~1.4 MMbbl/d since early 2010?
You actually did build that.
All of the increase in domestic US crude oil production has come from State and privately owned mineral leases. Production from Federal leases has declined by about 300,000 barrels per day since 2009 (Source: U.S. Energy Information Administration).
Pres. Obama: That’s why my administration will keep cutting red tape and speeding up new oil and gas permits.
Drilling permits that once took 30 days to be approved now take more than 180 days. Even relatively simple things like the approval of development plan (DOCD) revisions are sometimes drawn out to nearly 300 days. As of a year ago, the average delays for independent oil companies are currently 1.4 years on the shelf and almost 2 years in deepwater:
While the permiting process has recovered a bit over the past year, it is still very slow (Source: Quest Offshore Resources).
Between the “permitorium” and high product prices, many of the best, most capable drilling rigs have been moved overseas. Once we manage to get permits approved, the delays in obtaining a rig can be almost as long as the permit delays were. In this “dynamic regulatory environment,” wells can’t be drilled quickly enough to compensate for decline rates, much less to increase production. This is why the production rate in the Gulf of Mexico is still 300,000 bbl/d lower than it was prior to Macondo. The only red tape you have cut, is red tape that your maladministration created.
Pres. Obama: So tonight, I propose we use some of our oil and gas revenues to fund an Energy Security Trust that will drive new research and technology to shift our cars and trucks off oil for good.
What do you mean by “our oil and gas revenues”? You don’t generate any oil and gas revenue. The Federal gov’t does generate some revenue from the private sector development of Federal mineral leases.
Federal mineral revenues for FY 2012 were HALF of what they were in FY 2008!
Federal mineral lease revenues for FY 2008 were $24 billion, with $18 coming from Federal offshore leases (Source: Office of Natural Resource Revenue).
Federal mineral lease revenue for FY 2012 was only $12 billion, with less than $7 billion coming from Federal offshore leases (Source: Office of Natural Resource Revenue).
The decline in Federal mineral revenues is really ironic considering the fact that the US Navy can’t afford to deploy a second aircraft carrier to the Persian Gulf due to a lack of revenue. The reason for maintaining a strong naval presence in the region is the free flow of oil at market prices (the Carter Doctrine). The Navy only expects to “save several hundred million dollars” by not delaying the deployment of CVN 75 USS Harry S Truman. The royalty payments from the missing 300,000 bbl/d of production could have been as much as $1.8 billion and have more than covered the cost of the deployment.
What’s even more ironic? We’re importing 50% more from the Persian Gulf than just three years ago!
U.S. crude oil imports from the Persian Gulf have risen over the last three years.
The actions of this administration have both increased our need to maintain freedom of navigation in the Persian Gulf and reduced our means to do so.
Great News! Siemens will generate an 18% return on investment on a project that will have a negative return on investment (-9%)… All at the taxpayers’ expense!
At first glance, this looked too good to be true…
White Sands breaks ground on Army’s largest solar array
April 26, 2012
By Ms Miriam U Rodriguez (ATEC)
White Sands Missile Range leaders came out to break ground and to commemorate the start of a renewable energy project at the site of the new Solar Photo Voltaic Array Project, the Army’s largest solar array, April 19 on WSMR.
A 42-acre tract of land located about ¼ mile northeast of the Las Cruces Gate next to main post will be the site where 4.115 MW of single-axis vertical azimuth-tracking ground-mounted solar Photo Voltaic panels will be installed.
[…]
In conjunction with the 4.115 MW project, WSMR will also be installing a 350 kW solar PV Carport at the parking lot for the Headquarters Building 100.
[…]
The total cost of both projects is $16.8M with a cost of $3.77 per Watt.
The solar project is being funded within an Energy Savings Performance Contract (ESPC) utilizing an Energy Services Agreement (ESA) that the Huntsville Army Corp of Engineers (COE) has awarded to Siemens on behalf of WSMR. Under the awarded task order, Siemens will maintain and operate the equipment and will provide the energy to WSMR. This agreement is for a period of 25 years. The simple payback is 18.1 years. The energy being provided will cost the same that WSMR is currently paying the local utility company which is a blended rate of $0.08/kWh.
$3.77 per Watt is less than $4 million per MW. That’s a big deal. Solar PV usually runs from $5 to $8 million per MW of installed capacity and $0.08/kWh is dirt cheap by solar standards. $0.08/kWh is only 25% more expensive than the levelized generation cost of natural gas-fired electricity generation.
On top of all that, the Army didn’t have to pay any of the $16.8 million construction cost. Siemens would recoup its costs by selling the electricity to the Army at the current market rate. What a deal for the taxpayers! Green energy for the same price as dirty old energy!
‘Fracking kills’: Yoko Ono joins star-studded cast fighting against hydraulic natural gas drilling in upstate New York
John Lennon’s son Sean Lennon, actress Debra Winger, songstress Natalie Merchant and “The Avengers” actor Mark Ruffalo have also spoken out in opposition to the extraction process criticized for potentially contaminating water supplies and damaging the environment.
By Glenn Blain / NEW YORK DAILY NEWS
Published: Friday, January 11, 2013
ALBANY — Hydrofracking is not the most glamorous of issues but the gritty subject is bringing a lot of glitz to the state Capitol.
Yoko Ono, the widow of ex-Beatle John Lennon, and son Sean Lennon became the latest celebrities to visit Albany Friday to press for a ban on the controversial natural gas drilling.
“Fracking kills,” Ono said at a press conference with other drilling opponents. “And it doesn’t just kill us, it kills the land, nature and eventually the whole world.”
By Steve Israel
Published: 2:00 AM – 01/13/13
If it were up to nearly four dozen future voters at a Middletown elementary school, fracking would be banned in New York — and the rest of the world.
Just listen to what those fourth-graders at Maple Hill Elementary School have to say about the controversial natural gas extraction method of hydraulic fracturing, or fracking:
“It could cause methane explosions, poison water and kill people. It killed cattle,” says 9-year-old Philip Gazer.
“Sometimes, because of fracking, earthquakes could happen,” says 9-year-old Sagnik Chakraborty, citing minor earthquakes in Ohio apparently caused by the underground injection of fracking waste.
Bottom line for the fourth-graders in the classes of Mary Hayes and Patricia McGorry?
“We don’t want to be poisoned by fracking,” says 11-year-old Nancy Jaime.
There you have it. Yoko Ono is either not smarter than a 4th grader or she has a strong desire to spend winters freezing in the dark. The wellhead price for natural gas in the US is currently in the range of $3.00 to $3.50/mcf.
The shale boom is the single biggest reason why natural gas prices are so low in the USA compared to most of the rest of the world…
Without fracking, there would be no shale boom and US natural gas prices could be $8/mcf or higher.
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