oil

How President Obama has increased our energy costs

The Institute for Energy Research (IER) has just released a report documenting “actions President Obama has taken to increase energy prices and to increase the costs of cars, trucks, appliances, ice makers, and a multitude of other items that use electricity.” The list covers the period from February, 2009, to September, 2014. The full list (available here) extends for 13 pages and provides links to individual actions. Here is a sampling from the list:

February 4, 2009

Cancelled 77 oil and gas leases in Utah that could cost American taxpayers millions in lost lease bids, production royalties, new jobs and the energy needed to offset rising imports of oil and gas.

March 30, 2009

Signed the Omnibus Public Lands Management Act into law. This $10 billion, 1200-page bill prohibited energy production on over 3 million acres of federal land, costing American jobs.

January 8, 2010

Energy Department issues final rule for conservation standards for some consumer and commercial products including dishwashers, dehumidifiers, microwave ovens and clothes washers utilizing controversial Social Cost of Carbon calculations to justify cost.

February 17, 2010

Department of Energy notified Congress that it would reprogram $115 million Congress appropriated to continue the Yucca Mountain licensing process, and instead use it to terminate the only national repository for spent nuclear fuel under current law.

December 23, 2010

Interior Department announced a new “Wild Lands” Secretarial Order that could place hundreds of millions of acres of public lands off-limits to American energy production.

August 26, 2011

The Department of State concludes its 36–month environmental assessment of Keystone XL pipeline, which would transport as much as 830,000 barrels of oil from Canada per day to be refined and used in the US. The review found that no significant adverse impacts to the environment would result from the pipeline. Yet no action was taken to approve the pipeline.

January 9, 2012

Obama’s Department of the Interior Secretary Ken Salazar’s announces a 20-year ban on uranium mining on one million acres of federal land in Arizona.

February 3, 2012

Obama Administration announces plans to close off 75 percent of Western oil shale—of which 70 percent is on federal lands—to development.

January 18, 2013

Announced EPA regulations that would mandate costly upgrades to Arizona’s coal-fired Navajo Generating Station. Such changes would increase power and could impact water prices in Arizona as well. The local Navajo reservation could also see increased unemployment due to regulatory impacts.

November 15, 2013

Proposed Renewable Fuel Standards (RFS) levels outlining the levels of renewable fuels to be blended into gasoline and diesel fuel in 2014. The proposal calls for 17 million gallons of cellulosic biofuels in 2014. As of August 2014 producers have only been able to generate 72,000 gallons due to cost and complexity of the process.

April 18, 2014

Delayed final judgment again on Keystone XL pipeline that would deliver millions of barrels of oil from Canada and states like North Dakota to refineries on the Gulf Coast. The project has been blocked by the Obama Administration since 2008.

Remember, the whole list covers 13 pages. What I’ve listed above is about one page.

The Obama administration, especially the EPA, has been in collusion with radical environmental groups to stifle energy production. Anthony Watts has a report on his blog showing that “FOIA’d Emails show outside ‘green’ lobby groups staffed up, collude with Obama EPA, calling rules’ legality into question.” See his full post here. It begins:

The Energy & Environment Legal Institute (E&E Legal)

released a report today [Sep. 15] revealing and piecing together dozens of emails obtained under the Freedom of Information Act (FOIA), which lay out in detail EPA’s collusion with senior activists within environmentalist pressure groups, and proving the real thinking about the intent behind and impact of EPA’s “climate” regulations.

Far from the required recusing to avoid the appearance of a conflict, EPA filled its senior political ranks with green pressure group activists, continuing their life’s work and coordinating with former colleagues from their new positions in government. These emails show the groups sharing jokes about EPA assurances that it isn’t waging a war on coal, and gloating about the courts serially siding with EPA as it rewrites federal environmental law. More important, they show the special role and undue influence these relationships provided, the very sort of influence the Obama Administration once disavowed.

Obama claims that he is for “all of the above” on types of energy production, but in practice, it seems that “all of the above” does not include things that actually work.

See also:

Obama Clueless on Energy – Part 1

Obama Clueless on Energy – Part 2

Obama administration still clueless on energy

Obama, the Keystone Cop-out

Obama’s April Fools Joke

Obama’s Climate Action Plan is Clueless and Dangerous

Atlantic off-shore drilling could boost economy by $23 billion

Fuel Fix, a blog of the Houston Chronicle reports that an industry study says that drilling for oil and gas on the Outer Continental Shelf off the east coast of the U.S. between 2017 and 2035 could:

Create nearly 280,000 new jobs along the East Coast and across the country.

Result in an additional $195 billion in new private investment.

Contribute up to $23.5 billion per year to the U.S. economy.

Add 1.3 million barrels of oil equivalent per day to domestic energy production.

Generate $51 billion in new revenue for the government.

“The Interior Department’s Bureau of Ocean Energy Management soon will begin the long process of developing a schedule for selling outer continental shelf drilling leases from Aug. 27, 2017 through mid-2022 – and the oil industry wants to make sure the Atlantic acreage isn’t left out.”

Although this area is technically open for exploration and development, the feds have not scheduled any leases, which is a necessary first step.  Leasing activity in the area has been inactive since the early 1980s.  The Obama administration withdrew a scheduled lease sale for the Mid-Atlantic area in 2011.

OCS-planning-area

The United States has recently experienced a boom in oil and gas production, but that has occurred almost exclusively on private and state lands. Federal land has been largely closed due to the policies of several administrations.

See also:

Open federal land to energy exploration and development to boost economy

The hypocrisy of Obama’s energy boasts

“The measure of a man is what he does with power”-Plato

President Obama has several times claimed, “that under my Administration oil production is higher than it has been in a decade or more.” That is a true, but misleading, statement because during the period FY2007 through FY2012, all of the increased oil and gas production came from private and state land, over which Obama had no control, meanwhile production from federal lands, over which he does have control, decreased.  Obama was hypocritically taking credit for positive events that happened in spite of his policies.

That assertion comes from a Congressional Research Service (CRS) report, “U.S. Crude Oil and Natural Gas Production in Federal and Non-Federal Areas.” Here are the data graphically:

Oil-production-1

Gas-production-1

This result reflects the use of fracking on State and private land and the de facto moratorium on leasing Federal land.

According to the CRS report, “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.”

“The shale gas boom has resulted in rising supplies of natural gas. Overall, U.S. natural gas production rose by four trillion cubic feet 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%.”

CRS also says that the bureaucratic burden of drilling on Federal land is much more burdensome than on state or private land, and concludes that production from Federal land will remain lower because “the regulatory framework for developing resources on federal lands will likely remain more involved and time-consuming than that on private land.” CRS notes that time to process drilling permits rose from 218 days in 2006 to 307 days in 2011.

There is great potential for discovery and production of oil and gas on Federal land, including off-shore drilling. However, as noted by Investor’s Business Daily, President Obama chose instead “to withdraw tracts of federal land that had already been cleared for oil and gas development” and he ignored a judge’s order to lift a ban on off-shore drilling in the Gulf of Mexico. In effect, Obama administration policies close about 85% of potential off-shore areas to drilling.

The Wall Street Journal reports: “Mr. Obama has blocked exploration and production on significant areas of the Outer Continental Shelf, and the few leases he has put up for auction contain land that is of little value to drillers….The U.S. oil and gas boom has been a rare bright spot in the otherwise gloomy Obama economy. Imagine how much more energy the U.S. could produce, and how many more high-paid jobs it could create, if the Obama Administration stopped being an obstacle.”

See also:

Open federal land to energy exploration and development to boost economy

President Obama’s “all of the above” energy policy isn’t

Obama’s April Fools Joke Shows off-shore areas still blocked by Obama policy

Petroleum and Natural Gas Potential of the Paradox Basin of Arizona, Utah, Colorado, New Mexico

The Paradox Basin is located in the four-corners area of Utah, Colorado, New Mexico, and Arizona.  The U.S. Geological Survey has just completed a study assessing the potential for oil and gas discovery.  They conclude that the area has potential for “560 million barrels of undiscovered oil, 12,701 billion cubic feet of undiscovered natural gas, and 490 million barrels of undiscovered  natural gas liquids…”  Read the report here (2.6 Mb).

There is also potential for oil and gas in the Holbrook Basin farther south in Arizona.  This has yet not been assessed. The Holbrook Basin does, however, contain a large resource of potash (potassium ore) that is being developed.  See: Arizona may become a major producer of potash.

Paradox-basin

Keystone XL pipeline and the Ogallala aquifer

The Keystone pipeline, which became operational in 2010, brings about 435,000 barrels of crude oil per day from Albert, Canada, to refineries in Texas.  Proposed additions to the pipeline would up that delivery to about 700,000 to 900,000 barrels per day.  One of the controversies is that part of the additions to the pipeline would pass over the northeast edge of the Ogallala aquifer in the Sand Hills of Nebraska. See map below. The concern is that possible oil spills from the pipeline could contaminate the aquifer.

Keystone-and-OgallalaWhile the concern over spills is something to consider, history shows that the pipeline is very safe.  According to TransCanada, the pipeline owner, there have been 14 spills since 2010, most of these occurred at pumping stations rather from a ruptured pipeline.  The typical spill was 5 gallons and the largest was 21,000 gallons but only 210 gallons escaped the plant.

But what if there is a major rupture where the pipeline passes over the aquifer?

Here is where geology comes in.  The geological situation is explained in detail by hydrogeologist Jim Goeke in an article in the (Nebraska) JournalStar. Dr. Geoke has had 40-years of experience with the aquifer.

The first thing you should realize is that the aquifer slopes from west to east, so only the downslope part of the aquifer would potentially be affected by a spill.

Secondly, the geologic nature of the aquifer, which at its shallowest is 300 feet below the surface, would tend to confine any spill to a very small area.

See also:

Fossil fuel resources of the United States

Shale oil and environmental concerns

A good reason to eliminate the Energy Department and its budget

Clean Coal: Boon or Boondoggle?

Book Review: Energy, Convenient Solutions by Howard Johnson

Howard Johnson, a chemical engineer, provides a comprehensive review of energy systems. He looks at the totality of energy sources, from animal dung to nuclear fusion, and examines the production, transmission, and use of energy, and the pros and cons of each.

The book is about ideas and solutions to our energy problems. “Any solution or group of solutions will be based on total energy systems. The systems involved include power-grid stations, transmission lines, fuel procurement and manufacture, waste disposal, local power generators, vehicles and vehicle power systems, transportation and distribution systems for fuels, and maintenance and repair facilities.”

Johnson laments that we don’t develop more of our own domestic resources. “America has a virtual sea of oil within its borders and around its shores. Thanks to what I believe to be misdirected effort to influence elected officials by some overzealous environmentalists, the most accessible of our known oil fields are off limits to American oil companies.” At the same time, he proposes to transition away from our use of fossil fuels for transportation and electrical power. This reduction in fossil fuel use is not because of any concern over carbon dioxide emissions, rather, Johnson resents our having to give our dollars to unfriendly or despotic foreign countries. He has a section devoted to the global warming issue.

To transition away from fossil fuels, Johnson advocates more use of biofuels, made from non-food sources, and use of geothermal energy. He explains each in detail.

Johnson has a chapter on politics and expresses some well-placed cynicism. “The reality of politics and political ideologies means that many politicians and bureaucrats, who know virtually nothing about energy, energy systems, and the economics of energy, will be making many of the decisions on what systems we use, the vehicles we drive, and how we create and pay for the new infrastructure.”

All in all, this book is a good primer for anyone wanting to learn about energy systems, their potentials and problems.

The book is published by Senesis Word Publishing and is available from Amazon.

Gasoline Prices and the Obama Energy Policy

When President Obama took office, the national average gasoline price was $1.83 per gallon according to the Energy Information Administration. As of this writing, the national average gasoline price is $3.39 per gallon. There are many factors that determine the price of gasoline, not the least of which is turmoil in the Middle East. The price depends on supply and demand and upon the expectations of supply and demand.

I don’t know if the Obama administration is simply clueless on energy, or if there is a determined ideological effort to cripple fossil fuel supplies in order to promote renewable energy, but the effect of administration policy is to discourage and hinder domestic production of fossil fuels.

In September, 2008, soon to be Energy Secretary Steven Chu told the Wall Street Journal, “Somehow we have to figure out how to boost the price of gasoline to the levels in Europe.” Gas prices in Europe averaged about $8 a gallon at the time.

Contrary to administration rhetoric that the U.S. should become more energy independent, administration policy seems to be directed to do all it can to stifle domestic production.

Following the Deepwater Horizon accident in the Gulf of Mexico, the administration imposed a drilling moratorium. That moratorium was lifted last October, but in fact still remains in force. The Interior Department has approved just one drilling application although more than 100 are pending. A federal judge ordered that the de facto moratorium be lifted but the administration has ignored that order. In fact, in early February, the federal judge held the Interior Department in contemp of court for dismissively ignoring his ruling to cease the drilling moratorium which the judge had previously struck down as “arbitrary and capricious.” Ironically, the de facto moratorium of Gulf drilling will deprive the federal government of $1.35 billion in royalties this year.

According to the Heritage Foundation, “Obama also reversed an earlier decision by his administration to open access to coastal waters for exploration, instead placing a seven-year ban on drilling in the Atlantic and Pacific Coasts and Eastern Gulf of Mexico as part of the government’s 2012-2017 Outer Continental Shelf Program.”

 The U.S. has abundant resources of oil and natural gas in shale deposits. According to the U.S. Geological Survey the U.S. holds more than half of the world’s oil shale resources. The largest known deposits of oil shale are located in a 16,000-square mile area in the Green River formation in Colorado, Utah and Wyoming. The USGS’s most recent estimates (April, 2009) show the region may hold more than 1.5 trillion barrels of oil – six times Saudi Arabia’s proven resources, and enough to provide the United States with energy for the next 200 years. But Obama’s Interior Department is reversing Bush-era policy by delaying leases saying they need to take a “fresh look” at the situation.

American-oil-shale

 

The EPA has added costly new regulations to refineries over concern with global warming. The EPA is also denying approval of the Keystone pipeline which would increase the amount of oil the U.S. receives from Canada by over a million barrels per day.

If all this were not enough, the Interior Department has instituted a new “wild lands” policy that will bypass Congress in establishment of wilderness areas which will further delay and restrict access to our mineral resources.

The next time you fill your car with gasoline, don’t blame the oil companies for the high prices, the fault lies squarely with Obama’s energy policy.

Arizona Fires, Floods, Earthquakes, and a Grand Canyon Time line

The Arizona Geological Survey has just released its winter edition of Arizona Geology magazine which is available for free download here. Each story is well-documented with photos and videos.

The lead story is a case study of the June, 2010, Shultz wildfire near Flagstaff which denuded the forest and with heavy rains, lead to flooding. “In June 2010, the Schultz Wildfire burned 15,000 acres of woodland on the east slope of the San Francisco Peaks in the Coconino National Forest. Near record monsoon rains in July and August produced debris flows and floods, the latter of which damaged dozens of homes, caused the temporary evacuation of over 1000 people, and led to one drowning death.”

The story on Arizona earthquakes shows maps of locations and magnitudes of 50 earthquakes recorded in Arizona during 2010. These observations are made possible by the new Arizona Integrated Seismic Network (AISN) which is in its third year in operation. The story tells us why Arizona earthquakes occur where they do. The article also provides a link to discussion and photos of the strong April 4, 2010, earthquake in northern Baja California, just southwest of Yuma.

Until recently, topics concerning geology were mostly absent in the displays and interpretive signs found within Grand Canyon National Park. That omission has now been remedied.

Billed by its creators as “the world’s largest geoscience exhibition at one of earth’s grandest geologic landscapes,” the Trail of Time interprets the geology of Grand Canyon’s spectacular views and its largely inaccessible rocks. The trail leads visitors towards key geologic concepts that can be read in the rocks of the canyon and serves to help people contemplate and more fully appreciate the enormity of geology and the larger meaning of geologic thought. One of the recurrent themes presented on the trail is that of “deep time…”

In the article titled “Summary of Oil and Gas Activity” we learn that oil & gas exploration and production, although small, does occur in Arizona. Additional wells were drilled for geothermal energy exploration and to test for carbon dioxide sequestration.

The Winter edition of Arizona Geology contains very interesting articles. Give it a look at:

http://www.azgs.az.gov/arizona_geology/winter10/arizonageology.html

Book Review: The Energy Gap by Doug Hoffman and Allen Simmons

The Energy Gap is a tour de force review of our energy resources, their potentials, pitfalls, environmental consequences, economics, and politics. The sub-title is “How to solve the world energy crisis, preserve the environment & save civilization.” Well not quite, but it is a start.

After three introductory chapters, the book devotes chapters, in turn, to coal, petroleum, natural gas, wind, solar, and green energy sources such as hydroelectric, geothermal, biomass, and tidal wave power. There are three chapters on nuclear energy including an explanation of the various types of nuclear reactors and the problems of waste disposal. Additional chapters are devoted to transportation, the energy grid, conservation & efficiency, and the politics of energy.

For each form of energy the authors delve into the history of formation, discovery, development, use, and reserves. The book contains over 200 illustrations, and five appendices. It is written in layman’s terms.

The authors promote nuclear energy and suggest that it should gradually replace coal as the major fuel for electrical generation. Although the U.S. has the highest installed wind generating capacity of any nation, about 25,000 MW, the authors say that wind and solar are not likely to become a significant resource because of the very high cost relative to fossil fuels, and because both wind and solar are intermittent and cannot be counted on to provide a steady peak generation capacity. They do promote these alternative types of energy production in niche markets which might have special advantage.

The authors are somewhat naive about mineral economics and worry that we will run out of fossil fuels before we fully develop alternatives. But “the harsh reality is that, other than hydroelectric power, most renewable technologies are not able to compete economically with fossil fuels.”

They present an energy plan which includes:

Use of renewable energy only where it makes sense.

Shift automobile and light truck production to hybrids and electric. This would increase need for electricity by about 15%. (The only reason for this shift is the author’s unsupported belief that we should reduce carbon dioxide emissions. I think this is impractical and people will not buy electric cars until battery technology makes it possible to go 500 miles between charges.)

Accelerate construction of new nuclear generating stations and add reactors to existing plants.

Make buildings more energy efficient.

Expand exploration for oil and natural gas which “will be needed until new nuclear plants can come on-line and our vehicle fleet is switched to electricity.”

The authors specifically say we should avoid biofuels because they cause more environmental damage than fossil fuels. They warn against “clean coal” because the infrastructure costs are too high and the possible hazardous effects of storage are too uncertain. (See my article “Clean Coal”: Boon or Boondoggle for background.

They also warn against methane clathrates because they think frozen deposits of natural gas are too risky to exploit.

While I disagree with some of their proposals, I recommend the book just for its extensive review of energy resources. The book is very up to date on energy technology and even discusses the Gulf oil spill.

The book is available at Amazon.com. The authors also maintain a very interesting website: The Resilient Earth.

For another take on the energy problem see A Free Market Energy Vision from MasterResource.

Obama’s April Fools Joke

“Obama greatly expands drilling for oil, gas off American shores” read the front page headline in the April 1 edition of the Arizona Daily Star. This Associated Press story claimed that “President Obama threw open a huge swath of East Coast waters and other protected areas in Alaska and the Gulf of Mexico to drilling Wednesday, widening the politically explosive hunt for more homegrown oil and gas.” “The president’s move allows drilling from Delaware to central Florida, plus the northern waters of Alaska, and exploration could begin 50 miles off the Virginia coast by 2012.”

That would seem to be a major change in policy, but it is not what is seems to be. Obama is actually delaying outer continental shelf (OCS) exploration and banning exploration closer to shore.

Those areas were actually opened for exploration in late 2008 when Congress, responding to high gasoline prices, lifted a moratorium on exploration. Obama’s Interior Department has been dithering and delaying implementation, and from the story we see that the delays will extend another two years.

According to the Mineral Management Service’s estimate of “Technically Recoverable Undiscovered Resources”, here’s what the new “Obama moratorium” is locking up: 572 million acres that may contain 17.5 billion barrels of oil and 76.5 trillion cubic feet of natural gas. But Obama wants us to be energy independent. And remember, the Department of the Interior has plans to lock up 13 million acres of land in the west by using the Antiquities Act.

Compare the two maps below. The first shows areas available for exploration after Congress lifted the moratorium in 2008. The second map shows areas available for exploration under Obama’s new plan.   Note on first map: job opportunity, spell checker needed.

OCS-2008

 

 

OCS2010