In a raft of articles on this blog and elsewhere, the surge in U.S. gas production–due mostly to rapidly increasing output from shale formations–has been touted as a key savior of domestic drillers and consumers.
At the same time shale gas has been more than a headache for LNG exporters and pipeline monopolists, for some it threatens to become a nightmare – softening prices, competing with pipeline supplies, driving LNG demand to spot markets – generally making a pain of itself, from the viewpoint of the gas industry’s would-be GOPEC.
By providing a plentiful alternative source of supply for the world’s largest gas market, the U.S., shale gas has reduced wellhead netbacks throughout the Atlantic Basin. International reverberations have been dramatic. Even the Russian Bear, feeling the hot breath of the market, is softening its pricing terms for international gas sales.…
In the wake of the BP well blowout in the Gulf of Mexico and the attempted terrorist bombing of New York’s Times Square, the broadcast media have been full of the sackcloth and ashes crowd pronouncing once more the end of the hydrocarbon era and the vital need for the U.S. to “break our oil addiction” ASAP.
Their soundbites start with a half-truth and end with a fallacy. We are told that “60 percent of U.S. energy supplies still come from oil and gas,” with the implication that (i) all of that is imported; and (ii) the pittance that we produce domestically all comes from offshore facilities.
It is true that 60 percent (actually 62.5%) of our energy comes from oil and gas. But the portion that comes from natural gas, about 24% of total U.S.…
The U.S. Environmental Protection Agency (EPA) has proposed to effect a reduction in CO2 releases in the U.S. by raising the required fuel economy standards for new cars in 2014 and again in 2016. The current standard, now at 30.2 mpg for passenger cars (everything here is about passenger cars, the analysis of light trucks will have to wait) will rise to 35.5 mpg in 2016.
EPA claims that they used a carbon price of $21/tonne to establish the appropriate increase in fuel economy. The EPA also claims that these standards will reduce CO2 releases from the vehicle sector by 21%. Well, at least they are not using the number 19. This proposal will have a minute effect on CO2 levels and is unlikely to come in at the very low or “negative” cost per tonne of CO2 claimed by its proponents.…