Dear Shale Protestor,

Our world runs on hydrocarbons.  Even 40-years after the painful Arab oil embargoes in the 1970s, the world is hugely dependent on hydrocarbons.  According to the IEA, 90% of the world’s fuel comes from coal, oil, natural gas, wood, waste and various biofuels.  All of them are hydrocarbons.  How did this happen?

Some people think that alternatives have been under researched and underfunded which explains why the world is still stuck on hydrocarbons.  Hmmmm.  If alternatives really have that much potential wouldn’t you think that they would be farther along by now?  Afterall, the first solar cell was developed by 1902.  The first wind mill dates to before recorded history.

Let's face it. We have yet to overcome stumbling blocks that prevent widespread adoption of these technologies.  Most people don’t live where the sun always shines (the desert) or where the wind always blows (high plains).  Electricity is prohibitively expensive when it must be transported and stored to be consumed where people actually live.  The other big bugaboo, which isn’t talked about much, is the massive footprint of these technologies.  Acres upon acres of solar and wind farms are more disruptive to the environment than a handful of directionally drilled natural gas wells.  In Germany, they stopped subsidizing solar farms on agricultural land.  America will figure this out, too.

Some people think that the ability to externalize pollution costs (i.e., not pay for them) keeps people burning hydrocarbons without thinking about the dangers of global warming.  I’m not so sure I buy this either.  I don’t pretend to be a climate scientist, but I do remember the Time Magazine I saw when I was a kid.  It warned of the approaching Ice Age (“Another Ice Age?” June 24, 1974). Presumably scientists have learned a lot since then, but it used to be that they were more concerned about global cooling than global warming.  Some still are. The current period of warming, even if it is being caused by too many people burning hydrocarbons, could well be the harbinger of another period of cooling.

Conspiracy theorists think that the sheer size of most hydrocarbon extraction enterprises make them suspect.  Deep pocketed industry greases politicians and regulators with money in an effort to co-opt them.  Well, maybe.  I find the conspiracy theory a little like the theory about banks.  Big banks are bad banks because they are big banks.  It ignores the benefits from economies of scale, employment and tax revenue.  Being cynical about the ability of democratically elected government to determine the public good is seen as sophistication in some circles, but it also insults the intelligence of the voter. 

The fact is hydrocarbons have dominated the world's energy supply since the cave man discovered fire. 

Why?  

They are a vastly superior fuel.  Just like sunshine and wind, they occur nearly everywhere. The world is not running out of them. It is only running out of the most obvious places to harvest. Infinitely flexible, natural gas, in particular, is LESS polluting, requires LESS water and land, and creates FEWER waste products than solar and wind.

In some ways, it’s quite simple. Drill a well and Mother Earth pushes hydrocarbon into it. The trick is estimating whether there be enough naturally occuring hydrocarbon to repay the cost of the well and return a profit.  Increasingly the answer is yes.

Till next time,

Energy Mom
New York City

Dear Shale Protestor,

Next week I will appear on a panel sponsored by the Cornell Institute for Public Affairs to discuss practical ways of moving forward with hydraulic fracturing.  I am the investor voice on the panel.

So what am I going to say?

I will say that politicians and celebrities are way ahead of themselves in enthusiasm for energy that does not come from burning hydrocarbons.  

Starting in the 1970s, during the painful inflation caused by the Arab oil embargoes, the world and its best scientists began trying to find substitutes for hydrocarbons.  Yet, so far, the only substitute with the ability to scale across geographies and demand patterns is nuclear power.  If you don’t believe me, look at the IEA’s chart of the World Total Primary Energy Supply.

Smart, technologically advanced countries, like France, Germany, the United States and Japan, built large fleets of nuclear power plants to diversify away from hydrocarbons.  Yet, after the Fukushima Daiichi disaster, people in Japan and Germany insisted that the government shut down most of the plants.

Germany is also installing large scale solar and wind farms, but a political backlash is brewing around them, too.  According to a recent article in ReCharge: The Global Source for Renewable Energy News, the renewable surcharge will spike nearly 50% next year. The average German consumer could see their power bill rise by as much as 11%.  A renewable surcharge of the German magnitude here in the United States would essentially double most consumers’ electricity bills.

If nuclear is too controversial, and wind and solar are too expensive, what is left?

Investors, like me, are putting their money on hydrocarbons.

http://www.cipa.cornell.edu/news/index.cfm?news_id=265 

Dear Shale Protestor,

Riverkeeper announced support for the Champlain Hudson Power Express today[1].

Riverkeeper is the environmental lobby organization led by Paul Gallay and Robert F. Kennedy Jr.  The energy policy they support includes phasing out coal, stopping shale and shutting down nuclear power.  How's that for a Gordian knot of an energy policy?

Champlain Hudson Power Express would import wind and hydro power from Canada.  That must seem like a timely solution to extreme greens.  Yet, the public is becoming increasingly skeptical.  Who really benefits?

It’s not consumers.  Renewable power transmitted across long distances isn’t efficient or cost effective.

It’s not workers.  Renewable power generated in another country doesn’t build local jobs or a tax base.

It’s definitely not utilities. 

Here's another guess -- bankers. 

Riverkeeper should have figured out by now that local power is green power.  Extreme green will not get the job done.  If New York City needs an extension cord, let’s run it to a New York power plant.

Till Next Time,

Energy Mom

New York City

[1] De Avila, Joseph, “Power Lines Drawn,” The Wall Street Journal, June 19, 2012, p. A15.

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Dear Shale Protestor,

"Everyone is entitled to his own opinion, but not to his own facts." 

-- Daniel Patrick Moynihan, United States Senator from New York, 1976-2000

Here are eight facts about New York:

• ·      New York is the #4 largest consumer of natural gas in the country.
• ·      New York consumption is growing because New York City passed a law requiring buildings to stop burning #6 oil by 2015. 
• ·      New York imports 95% of the gas it consumes.  
• ·      New York’s average electricity price is 50% higher than the average electricity price in the United States.
• ·      New York’s gasoline price is the 13^th highest in the nation.
• ·      New York collects 4% to 8.88% individual income tax.  It is a graduated tax based on the amount of income a person makes.  8.88% is the 7^th highest individual income tax rate in the country, which is only surpassed in Hawaii, California, Oregon, Iowa, New Jersey and Vermont.
• ·      New York pays $5-8 billion every year for natural gas to producer states in the Southwest and Canada.
• ·      New York possesses an estimated 20% of the Marcellus shale deposit.

New York is a state with high fuel prices and high taxes that is arguing about whether it will develop its shale.

Here are eight facts about Pennsylvania:

• ·      Pennsylvania imported 75% of its natural gas before it developed the Marcellus.
• ·      Pennsylvania produced 1.3 TCF of natural gas in 2011, about twice the amount that it consumes.  
• ·      Pennsylvania has a budget surplus.  The state just raised its budget from $27.1 billion to $27.6 billion because of the surplus.
• ·      Pennsylvania has 150,000 jobs created from natural gas development.
• ·      Pennsylvania will be the home of the billion-dollar ethane cracker announced by Shell in March 2012 and the attendant petrochemical industry.
• ·      Pennsylvania’s gasoline price is the 32^nd highest in the nation.
• ·      Pennsylvania collects 3% individual income tax.  It is a flat tax.
• ·      Pennsylvania sells natural gas to New York.

Pennsylvania is a state with low fuel prices and low taxes that is developing its shale.

So which state is the better place to live and work?  You can be the judge.  

As for me, I live in New York, but neighboring Pennsylvania looks pretty attractive.  Especially since I'm one of those engineers who worked in the "dirty" petroleum industry "raping" the earth.  I used to think that my job was noble.  I helped the country develop its own petroleum in the Gulf of Mexico and Alaska at a time when it was dangerously dependent on OPEC.  But since I came to New York, I've been re-educated.  According to liberal arts professors, medical professionals and celebrities, I polluted drinking water, gave children asthma and am forever responsible for toxic chemicals left in the ground to destroy future generations.  Oh brother ...

No doubt, Pennsylvania’s success was not problem-free.  Once the Marcellus was proved, exploration and production companies rushed in causing a land grab and drilling frenzy that Pennsylvania was not prepared for.  (In the company's defense natural gas prices were the highest ever and governments around the world were predicting that the world would run out of everything because of the rise in the global middle class.)  Pennsylvania worked hard to overhaul its regulation.  Now it is a model for other states.   Problems were fixed, and when new ones occur, I am confident that they will be fixed, too, because that's what scientists and engineers do.

So when will New York notice what happened? 

Maybe it just did.

Governor Cuomo floated a proposal yesterday to allow hydraulic fracturing in communities that want it.  Landowning women and men -- representing 800,000 acres and 17,000 families -- rode buses to Albany the day before, and demanded their right to develop the resource that they own.  

You get the picture.  I think the Governor did, too.

Till next Time,

Energy Mom

New York City

Dear Shale Protestor,

I just returned from the front lines of the Shale War raging in New York State.  The battle lines have been redrawn in a really surprising way.

A study released by the Survey Research Institute at Cornell University in early June
http://www.scribd.com/doc/96295495/Report-2-2012-Natural-Gas-Drilling revealed that the strongest objection to shale development comes from those who live in fringe urban areas around communities like Ithaca, Rochester or Syracuse.  People who go to the city for work, but come home to the country for rest, perceive that they will bear the disruption of shale development while receiving few of the benefits.

They and their political representatives keep throwing up environmental and health arguments to delay or stop shale.  It seems that technical research and analysis, plus years of field experience in Pennsylvania’s rural areas, which are most similar to New York’s, are not enough to prove that shale can be developed safely.  There’s always something else to worry about and another objection  -- invariably life threatening and cancer causing -- that must be addressed.

It also seems that these people believe that other forms of energy are right around the corner. 

On the other side are landowners and rural communities located too far from the city for work who cannot develop their mineral rights and provide the economic benefits of doing so for themselves and their communities.  They perceive themselves being oppressed by people one rung up the economic ladder. 

Increasingly this struggle boils down to class warfare.  Right now it feels like the losers are the country folk.  Or to put it another way, those who make their living with their hands are getting beat by those who make their living with words.  Natural gas would be the great equalizer, but those who don't want any change and benefit from low wages in depressed rural economies are dominating the discussion.

Yesterday a group of strong-willed women, and their men, stepped forward to change that.   It’s a group who come from all walks of life.  They understand how vital inexpensive energy is to family budgets.  From first hand experience they know that not developing shale means paying higher prices for fuel and electricity, losing their kids to better jobs in other states and in some cases even losing the family farm.  

Calling themselves the Women’s Energy Leadership Coalition (WELC), they came together in Albany yesterday for the first time.  Volunteers, not industry shills as the opposition derisively labels them, they know that shale can be developed safely because it is already being done. Their stories are captured in a film called, Silent No More.  Just like modern day sufragettes, they donned sashes inscribed with the words of the film as they marched to the capitol to give voice to their cause.  

These people represent the 17,000 rural families who own 800,000 acres of shale land.  

Every one of them wants it developed safely.  

They also want it developed now. 

Till Next Time,

Energy Mom

New York City

Dear Shale Protestor,

First I was invited to be on the panel.  Then I was uninvited.  Then I was told that I couldn't be on the panel, but I could present for ten minutes to the audience. Oh please!  Here's the editorial I wrote that is running in the Syracuse newspaper today about the whole sorry affair.

"I’m sure it was a packed house at the Landmark Theatre on Saturday night. The docu-farce Gasland was screened followed by a panel discussion moderated by Alec Baldwin. It fleetingly crossed my mind to attend, but I knew I would not be welcome. 

I am a trained engineer who has spent my career in the energy business.  Alec Baldwin’s crowd is probably not interested in what I have to say.  It’s not dramatic and flies in the face of the most of the stereotypes being pushed. There’s no little guy being taken advantage of.  There’s no robber baron corporation. There’s no government conspiracy plot.  Plus, the science and facts take more than ten minutes to understand.

Gasland was screened as if it is an expose of what is happening outside of New York, and what will happen in New York if hydraulic fracturing is permitted.  The truth is that it’s a slight of hand that has duped a lot of people and is making civil discussion of the future of natural gas almost impossible. Entertainers -- like Josh Fox and Alec Baldwin – want to cause a commotion.  It’s good for their business, themselves.

Gasland leads you to believe that “fracking” is new. The truth is that hydraulic fracturing to make wells more productive is more than 60 years old.  It is used in 90% of oil and gas wells, many geothermal wells and even water wells.

Gasland perpetuates the lie that 596 harmful chemicals pollute every job. The truth is that the entire list of chemical additives is available on Fracfocus.org, a searchable database with well-by-well records. In New York, revealing all additives is required to receive a permit to drill. Proportions are proprietary, just like any other “recipe.” Look at any canned or packaged food you eat: there are ingredients and chemicals galore, but not the percentages or amount.

Gasland continues to spread the myth that the oil and gas industry is unregulated by the Clean Water Act, Clean Air Act and Safe Drinking Water Act. The truth is that the industry is highly regulated on both the federal and state levels. New York state regulations are among the toughest.

Finally, Gasland is mostly famous for the flaming faucet. The truth is that low concentrations of methane are pervasive in the Earth’s crust and easily accumulate in water wells.  Lighting kitchen water on fire is an old party trick.  It’s nothing new in some parts of the country and guaranteed to cause a stir every time.

 

Gasland reminds me of Orson Welles’ War of the Worlds, except it’s not that original. Watch Truthland, which was posted on YouTube a few days ago, and learn the story that Josh Fox chose not to tell because he thought it was “irrelevant.”

So had I gone to the Landmark Theatre on Saturday night, I would have asked a few questions, beginning with:  Who walked?  Who rode a bicycle?

Next I would ask:  Who heats their home?  Who has air conditioning?  Who reads at night? 

Then I would ask members of the audience to take off all blended or polyester fabrics, remove shoes with synthetic soles, discard plastic water bottles and Solo cups, sit on the floor instead of plastic chairs.

 

Finally I would say raise your hand if you support nuclear power, want to host a wind farm, cut down shade trees to install solar panels or grant access to a power transmission line.  If you raise your hand, you can get off the floor and sit in a chair.

Now with all the hypocrisy in full view, let’s talk."

Till Next Time,

Energy Mom

New York City

Dear Shale Protestor,

Last week I was in a small group that met with an assemblywoman whom I’ll refer to as Ms. B.  Ms. B represents the district that is the most vocal critic of shale development in New York.  Activists in this district are responsible for funding the shale protest and masterminding the 90 bans and moratoriums on shale development that have been passed here. As her website states, Ms. B was first elected in 2002 and is now starting her fifth term.

Ms. B began the meeting by telling my group that climate change is her number one issue.  She declared that her reading tells her that the United States must completely de-carbonize its economy by 2020.  If it doesn’t, it will be responsible for catastrophic collapse of the environment.  Ms. B, who holds an M.A. in English and taught high school English before she was elected to the legislature, knows this because she reads it.  Unfortunately, she just doesn’t read anything that doesn’t agree with this view.

What’s more, Ms.B’s well-educated constituents –- the faculty, students and staff of a well-known university where my daughter will matriculate in the fall –- agree with her, which is why they keep re-electing her.  If her constituents get their way, hydrocarbons will be headed for the dumpster.  Forget the industrial revolution; never mind the cost or intermittency of alternatives; Mother Nature is terminally ill and can only be saved by drastic action!

Ms. B also demonstrated how she lives by her convictions.  She refused to turn on the lights even though her office was dark.  When one person reached for the switch, she muttered under her breath,  “We don’t do that around here.”  Instead, she tried to open the blinds, which would have been a good idea, except they didn’t work.

When I suggested she read Sustainable Energy Without the Hot Air by David J C MacKay in order to understand what de-carbonization will take, Ms. B said that she had never heard of it.  MacKay wrote the book for British policy makers when he became alarmed at the physical impossibility and excessively optimistic claims of most renewable energy.  He is professor of natural philosophy in the department of physics at the University of Cambridge and chief scientific adviser to the UK Department of Energy and Climate. The book is available for free at this link: http://www.withouthotair.com/.  I recommend it for any person passionate about de-carbonization like Ms. B.

In Sustainable Energy Without the Hot Air, MacKay shows that only nuclear power generates enough energy to replace hydrocarbons.  The world already knows this.  After 40-years of trying to replace hydrocarbons after the 1973 Arab oil embargo, the only non-hydrocarbon source of fuel of any significance in the world is nuclear power.  Today nuclear power makes up 10% of the world’s fuel supply, while the other 90% is hydrocarbons. The figures are on the IEA (International Energy Agency) website.

Wind resources are simply not in the right place.  Turbine farms take up valuable land and generate most of their output at night when it’s not needed.  Solar is good for the desert, but if the panel is shaded, pitched or oriented in any direction except South, output declines significantly.  Bio-fuels raise food prices.  Wave energy is in its infancy.  Then there is my personal favorite: hydroelectric dams.  My great-grandfather lost his farm to one of these projects in the 1940s. 

So has Ms. B thought through the implications of her position?  She kept saying that the United States does not have an energy policy.  Does Ms. B have a coherent energy policy?  Does Ms. B support nuclear power? 

No.  In fact, she hates nuclear power, too.

Till Next Time,

Energy Mom