Don’t Count on Cheap, Fracked Gas Part 2

April 9, 2013

You thought that America’s home grown energy was yours?  You thought “drill baby drill” would lower energy prices?

As more and more export facilities are readied for shipping natural gas to energy hungry countries in Asia and elsewhere, that 200 years of cheap natural gas looks more and more like a Mirage.

India’s Ambassador writes in the Wall Street Journal that they are ready to take that gas off our hands.

WSJ:

Despite the global economic slowdown, India’s economy has grown at a relatively brisk pace over the past five years and India is now the world’s fifth-largest energy consumer. It imports 75% of its energy (especially oil and petroleum products) today and expects to import 90% over the next decade. As a result, India is working hard to diversify its energy supplies. Still, the demand for energy keeps growing at a rate of 5%-6% annually. My country needs to secure more supplies to foster the socio-economic development of millions of our people who are still living in poverty.

Happily, the U.S. has experienced a boom in the production of natural gas. The ability to tap large formations by advanced technologies has yielded a large amount of this energy resource that achieves significant savings compared with diesel, especially when used in high-mileage heavy-duty vehicles.

Liquefied natural gas is transported more easily than other forms of energy. Significant investments, including some from India, have been made in technologies designed to harness LNG safely and efficiently and to build new facilities and ports to distribute it globally.

-

The prospect of increased Indian investment in the U.S. natural-gas market will usher in a new era for a strong and mutually rewarding India-U.S. energy partnership. Through it, we will further consolidate our strategic ties and deepen cooperation for the benefit of millions of people in both countries.

Heritage Foundation blog:

Exporting natural gas would provide a tremendous benefit for the American economy, as it would expand market opportunities. Given the disparity in prices between domestic and foreign markets (Asia, Europe, and Latin America, for instance) those opportunities should prove to be plentiful even with the costs of transport tankers and liquefaction plants.

 

Message to consumers: Whether its tar sands or fracking, the environmental impacts locally are your problem. Shut about about price – the global market will set that.

Message to utilities: You won’t get a predictable price 10 years out on natural gas for that new generation station you are building.  However, I can offer you wind power at a guaranteed rate for 25 years.

It would be a pretty one-sided affair if renewable energy technologies were not exploding as they are, and continuing to drop in price.  One possible corollary: if you are a three dimensional chess playing President, you keep smiling and saying “All of the above” while the energy revolution gathers explosive steam….

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15 Responses to “Don’t Count on Cheap, Fracked Gas Part 2”

  1. daveburton Says:

    America’s trade balance matters. Exports are good for America, and good for Americans. We can’t import all that oil and export nothing but wheat in return, forever. The only reservation I have about natural gas exports is the safety of the tankers.

    If wind were a competitive energy source, it wouldn’t need mandates and subsidies to compete. The truth is that wind is a frightfully expensive and fatally intermittent energy source. Guaranteeing a price is of no use if you can’t guarantee actual delivery of the energy when it’s needed.

    Natural gas can be stored in tanks, and used when it’s needed. Wind can’t.

    Today’s energy revolution is in fracked fossil fuels. My whole life I’ve been hearing about the “energy crisis.” Incredibly, though we still have a severe oil shortage, the energy crisis, as a whole, is over.

    The question of what will be the next energy revolution is interesting, and important. It might be thorium (I hope so). It definitely won’t be wind.

    • greenman3610 Says:

      export gas–>price goes up—wind wins. Solar revs up right behind. Nuclear is nowhere.
      simple economics.

      “wind subsidies” is a canard. I don’t see the free enterprise system investing in thorium, or any nuclear project, for that matter.

      http://climatecrocks.com/2013/01/02/why-youve-heard-of-solyndra-but-not-vogtle/


    • Dave, Are you opposed to *every* power source that utilizes free sustainable fuel? Wind produced 146 TWh of American electricity in 2012. The capital costs have fallen by 21% since 2010. Storage and an grid technologies are making energy supply and demand as entrepreneurial as software.

    • daryan12 Says:

      Dave,

      The problem here is, exporting NG from the US to india means the US public have all the environmental problems associated with Shale gas imposed on them, the corps plus india take all the gains? What’s in that for the average joe? Particularly if its his drinking water to his farm that’s being affected.

      “Natural gas can be stored in tanks”…ya and hydrogen can be used to store energy also “in tanks”. Further some renewable sources, notably solar CSP, geothermal, hydro & tidal are not as variable in their outputs as wind, so its a straw man argument.

      “energy crisis” the crisis is more of the end of cheap easy to access fossil fuel energy than energy as such. There is indeed plenty of fossil fuels left, but they are expensive and difficult to extract, cannot be extracted at any arbitary rate of our choosing (leading to some temporary shortages in the future), with a much heavier carbon and environmental footprint.

    • daryan12 Says:

      Oh, and “subsidies to wind” ? What about the enormous subsidy of being able to dump cancer causing chemicals into the water supply and not paying for the clean up cost? Or the subsidy of pumping millions of tons of a climate altering gas into the atmosphere, leaving it to old Uncle Sam to pay to pluck people off roof tops next time there’s a hurricane.

      You should also note, that the bulk of global energy subsidies go not to wind or renewables, but fossil fuels, as I discuss here:

      http://daryanenergyblog.wordpress.com/2012/08/08/the-windbaggers-charter-and-energy-subsidies/

  2. Mike Dever Says:

    Wind is competitive now, if you attempt ANY CLEANUP of the MASSIVE Pollution Coal, and Fracking causes. Or, if you do the slightest Economic Analysis of the Current Damages Global Warming is doing to the Nations Agriculture TODAY.

    Fact: You get Better Business News from the /Environment section of the news paper.

    Every Lake and Stream in America is Polluted with Mercury from burning Coal.
    1/3 of our streams are polluted by farm run off.

    China has lost 1/3 of it’s rivers from the 2 degree rise in global warming temperature.
    There is a GLOBAL DROUGHT.

    There is a Four Years Running US Drought:

    http://droughtmonitor.unl.edu

    And unless you stop the NUTS from destroying your Food Supply by Ignoring Climate Change You’re going to have a hard time finding FOOD to EAT.

    NO NEW SOURCES of CARBON.
    This is not a Drill.

  3. Mike Dever Says:

    Solar Energy will be Cheaper the ALL OTHER Energy Sources in 7 years.
    Only a FOOL would invest in Anything Else.

    Meaning We Can Shut Down TarSand Operations Today, with NO Economic Damage.
    We can STOP Fracking Operations Today, as they Leak more Methane then they pipe.

    This isn’t your kids future we’re worried about.
    It’s YOURS.

  4. Bruce Miller Says:

    Yankee Doodle! You have been sold out! Again! By your own kind! Thorium technologies suppressed by the American Nuclear Estabishment and the patent holders, proprietary secrets folk and the “Sunk Money” of the corpocracy. You are so knee deep in radioactive waste. It is so mounting! Daily! There is no solution underway or in sight! Time for change? not bloody likely! huge debt to China keeps you running hard to pay interest, no cash left to develop America!


  5. [...] You thought that America's home grown energy was yours? You thought "drill baby drill" would lower energy prices? As more and more export facilities are readied for shipping natural gas to energy …  [...]

  6. pendantry Says:

    TANSTAAFL. Anything free is worth what you pay for it — and all too often the bill isn’t rendered in currency.

    The root problem is that bean counters call the shots. Economics is field riddled with unproven theories passed off as fact; and the practitioners of this arcane art are, in truth, no better than astrologers telling people what they want to hear.


  7. [...] 2013/04/09: PSinclair: Don’t Count on Cheap, Fracked Gas Part 2 [...]


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