Ideology, Technology, and—Coming Up a Poor Third—Common Sense*

By Sol W. Sanders
Monday, April 7th, 2014 @ 3:19AM

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Nowhere is the struggle fiercer between half-aspiring ideology and good old common sense than in the Obama Administration’s energy strategy — or lack thereof.

Having been ambushed by intrepid technology in the exploitation of natural gas — “the shale revolution” — the country’s energy markets are in partial abeyance. The shale gas has blocked the initial Obama drive to raise fuel and energy prices to force consumers to higher cost (if heavily subsidized even when facing bankruptcy) “alternative energy sources”. At the moment, the U.S. energy economy is poised between the fact that the new technology has brought abundance, even a temporary surplus, of natural gas, and the risk that a falling price might inhibit further exploitation of increasingly greater estimated reserves.

The door is still closed for maximum exploitation of gas, the least polluting by far of all the fossil fuels, by government fiat (refusal to lease public lands, pipeline certification, etc.). But there is growing pressure on the Obama Administration despite its leftwing base and the problem of “face,” for an obvious strategy to bolster a stagnant economy and the worst employment situation since the Great Depression.

Meanwhile, not only is the shale revolution building toward the vaunted calls from every recent president for “energy independence,” but it is creating additional revenues for those states who have defied the Obama Administration and its handmaiden the Environmental Protection Agency’s harassment. Pennsylvania’s more than six thousand unconventional wells, either producing gas or under development, lifted $224.5 million in fees off the state’s taxpayers backs last year. More than $2 billion in state tax revenue has been generated since 2008.

Despite the logic of giving shale gas free rein, the enviromentalistas continue to rant about the possible impacts of fracking — the method of reaching the gas — although there has been no significant pollution episode. That’s not only because of caution and superior technology of the drillers but the fact that the shale deposits generally lie hundreds of feet below water aquifers. Fracking skirts them and then drills horizontally to get at the gas (and sometimes oil). On the contrary, there have been several disastrous train wrecks in the U.S. and Canada, with the rapidly increasing movement of new-found American oil by rail rather than through safer and more efficient pipelines.

Nor do the enviromentalistas concede that the movement from coal to gas turbines for producing electricity has reduced the overall levels of pollution. Nor is there recognition that the cost of failure to authorize pipelines — the most dramatic example, the proposed Keystone XL pipeline which would carry Canadian crude (picking up Dakota oil enroute) to the Houston refineries and a portion, perhaps as much as 15 percent, into export. A part of that tragedy is that millions of cubic feet of gas are being “flared” — allowed to burn off in the air — in the Dakota oilfields because there are no pipelines or liquefying facilities to carry it to market. Not only do 1500 wells flare an estimated $100 million worth of gas each month, but the resulting pollution represents an unnecessary additional pollution hazard.

In one of the most curious misplaced arguments making the rounds of the talking heads spewing out nonsense on energy is the advocacy of government subsidized electric cars. Until there is a revolutionary breakthrough in battery science, there is no efficient way to store electricity. Recharging the car batteries at their current level of efficiency in electric engines is after all based on the nation’s creaking electricity grid, about half of the product of which is now produced by the devil incarnate of the enviromentalistas, coal. Imagine what would happen in the unlikely event there were millions of electric cars that needed overnight recharging.

Chris Faulkner, one of the leading lights in the downstream fracking industry and as much of a maven on world energy as you will find, argues that $5 billion would set up LNG pumps in the nation’s filling stations. Relatively modest changes in current car engines — some say at a cost of less than $1,000 a car — would permit them to use liquefied natural gas (LNG). In fact, LNG is being used by some city bus lines already (e.g., Washington, D.C.). And imported Indonesian LNG has been in common use in Japan, Hong Kong, and Taiwan for almost 50 years. (A French company has just signed a contract to export U.S. LNG to Taiwan.) Faulkner points out that if the large transcontinental trucking companies went to LNG at current costs, the saving would be about the tab of current purchases of foreign oil.

Perhaps someone will whisper the dirty little secret that LNG at the pumps would reduce the average motorist’s fuel costs by up to two-thirds. Is that going to happen before the elections this fall — or will we have to wait for 2016?

* A version of this article will appear on

Categories: ACD/EWI Blog, Economic warfare, Energy policy, Latest News, U.S. Policy

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