An Industry Under Assault
by Carl G. Langner
Introduction
Over the past several years, the U.S. Federal Government has been conducting a deliberate, sustained assault on our domestic energy industry, in an obvious attempt to shut down the domestic production and use of oil, gas, and coal – our most abundant and affordable energy sources. The assault involves moratoria on drilling throughout the majority of our offshore waters and across huge expanses of our public lands; use of the endangered species act and wilderness area designations to exclude or shut down some of our most promising oil development prospects; restrictive regulations to slow down both onshore and offshore drilling; and restrictive regulations to shut down existing coal fields and coal-fired power plants. Ironically, all recent administrations have made public policy pronouncements to the effect that our nation must reduce its dependence on foreign sources of crude oil, while at the same time as they continue to inhibit the development of our own plentiful domestic oil, gas, and coal resources.
While this assault has targeted the fossil-fuel sectors, the nuclear-electric and hydro-electric sectors remain relatively unscathed, perhaps because each of these energy sources has already been constrained and prevented from growing over the past 30 years. Also barely affected by the assault is the current boom in natural-gas production via the hydraulic fracturing of shale and other “tight” formations. Fortunately for all of us, the numerous attempts by the EPA and by environmental activists to slow down or shut down these “fracking” operations have largely been ineffective. However, government regulation of fracking is increasing rapidly and could significantly constrain this important energy source in the future.
The Federal Government’s assault on the energy industry is being carried out by the U.S. Congress, through ideologically driven federal agencies, including the Environmental Protection Agency (EPA), the Bureau of Ocean Energy Management, Regulation, and Enforcement (BOEMRE), the Bureau of Land Management (BLM), the U.S. Fish & Wildlife Service (FWS), and the U.S. Department of Energy (DOE). Both BOEMRE and BLM are parts of the U.S. Department of Interior, whose leader, Secretary Ken Salazar, is clearly anti-oil and anti-coal. In 2009, the U.S. Chamber of Commerce named a total of twenty-four federal agencies and twenty-five congressional committees that are significantly engaged in shaping our nation’s energy policies.
In addition to these governmental agencies, numerous environmentalist organizations have participated in disrupting fossil fuel production through direct litigation and through intense lobbying of our federal and state governments. These groups include the Sierra Club, Greenpeace, the National Audubon Society, Friends of the Earth, the Wilderness Society, the Natural Resources Defense Council, the Environmental Defense Fund, and many others.
Macondo Well Blowout
Most people are familiar with the infamous blowout of BP’s Macondo subsea well in the Gulf of Mexico on 20 April 2010, resulting from an insufficient cementing job down-hole and a blowout preventer that failed to activate. The ensuing rig fire and sinking of the Transocean Deepwater Horizon caused the deaths of eleven workers and produced a spill of approximately five million barrels of light crude that issued from the well over a twelve week period before the well was capped on 15 July 2010.
At its height, cleanup activities involved a veritable army of federal, state, and local response teams, who soaked up oil from the beaches, the marshes, and the open ocean affected by the spill. Activities included booms placed in the water, dispersants dropped from aircraft, and some 4000 skimmer boats capturing as much oil as could be found – in addition to the small armada of vessels working to stop the flow of oil from the well. As impressive as this cleanup work was, the human effort paled in comparison with the restorative powers of nature. By far the biggest cleansing agents at work in the Gulf were microbes that feasted on the oil, helped by evaporation due to the warm summer sun, together with dispersal effects of the ocean currents and storms. One researcher estimated that natural seepage of oil into the Gulf may exceed 500,000 barrels per year, thus ensuring a large community of oil-eating microbes.
President Barack Obama responded to the Macondo blowout by declaring it “the worst environmental disaster in American history.” He immediately imposed a six month mor-atorium on deepwater drilling in the Gulf of Mexico, to allow federal officials sufficient time to assess the safety of such drilling operations. (Deepwater here was defined as depths greater than 500 feet.) In addition to the drilling ban, the Obama administration canceled a pending lease sale in the Western Gulf of Mexico, a proposed lease sale off the coast of Virginia, and all proposed exploratory drilling in federal waters offshore Alaska. Shortly thereafter, the Interior Department began the process of creating truly draconian regulations to clamp down on offshore drilling – starting with total reorganiza-tion of the Minerals Management Service (MMS), now renamed the Bureau of Offshore Energy Management, Regulation, and Enforcement (BOEMRE).
These government actions resulted in the immediate shut-down of the 33 deepwater drilling units operating in the Gulf, immediate loss of 45,000 drilling jobs, and eventual loss of up to 100,000 secondary jobs across the Gulf Coast. Within weeks, the four most capable of these rigs were moved out of the Gulf to begin deepwater drilling work overseas. Other deepwater rigs were stacked while operators awaited new drilling permits. In addition to the loss of jobs and the substantial loss of drilling capability, our nation lost the energy production from the 33 idle deepwater wells. Note that the Gulf historically has provided 25-30 percent of U.S. domestic production, and in recent years 80 percent of the oil and 45 percent of the natural gas produced in the Gulf, has come from deepwater wells. One expert estimated that total production from the Gulf dropped by 240,000 barrels of oil equivalent per day since the Macondo blowout.
On 3 September 2010, Interior Secretary Salazar flew to Anchorage for a press confer-ence, at which, against established procedures, he announced a complete offshore drilling moratorium to include Alaska and the west coast for an indefinite period of time. Royal Dutch Shell, after spending more than $3.5 billion, and after 15 years of intensive environmental studies and repeated attempts to obtain necessary permits, was forced to cancel plans to drill three wells in the Chukchi Sea and one well in the Beaufort Sea, scheduled to begin during the 2011 summer season. As a final blow to the Beaufort Sea proposal, the EPA ruled that diesel exhaust from the drilling operation would harm the inhabitants of an Eskimo village more than 30 miles away! It is unclear whether Shell will continue to pursue these developments in consideration of the years of hassle from the U.S. government and the continuous litigation from various environmental groups.
The Gulf of Mexico deepwater drilling moratorium was overturned by a district court on June 22, then arbitrarily reinstated by Interior Secretary Salazar on July 13, and finally officially lifted on October 12, six weeks ahead of its November 30 expiration date. Once the moratorium was lifted, offshore operators were allowed to drill but only after submitting 1000+ page applications, complying with extremely complicated and detailed new drilling rules, and proving to the BOEMRE that they possessed adequate blowout containment resources. In addition to these new rules, operators were (and still are) required to wait patiently for months while BOEMRE evaluates their applications. As of May 2011, it was reported that only seven deepwater drilling permits had been issued over the previous twelve months. In essence, this new “permitorium” is producing the same result as the earlier moratorium, namely stifling the much needed offshore energy production from reaching our refineries and our general public. It remains to be seen whether the mountain of new regulations actually enhances safety, or whether these regulations will merely stifle innovation and increase drilling costs.
This correspondent had the privilege of attending a presentation at the 2011 Offshore Technology Conference, entitled “Next Steps in Offshore U.S. Regulation,” by Michael Bromwich, the new director of BOEMRE. Instead of encouraging our oil and gas industry to continue working hard, innovating, and flourishing, with all work continuing to be performed in as safe manner as possible, this man had nothing at all good to say about our industry or any person associated with it. Mr. Bromwich told his audience that the BOEMRE bureaucrats have been very busy developing stringent new regulations; that he plans each year to extend and tighten these regulations; and that he intends to convince foreign countries to adopt these or similar rules to regulate offshore drilling. At that moment, it seemed to me Mr. Bromwich was telling our offshore drilling industry that they are no longer welcome to operate in United States federal waters, or anywhere else on earth for that matter.
All the above offenses occurred in response to the unfortunate loss of eleven lives and one drilling rig at the Macondo wellsite. But how is this one incident connected with other companies operating in the U.S. Gulf and other offshore areas, especially consid-ering the industry’s exemplary safety performance record? According to Ray Tyson of Offshore Source newsletter, more than 50,000 wells have been drilled in the U.S. Outer Continental Shelf, including 4000 in water depths exceeding 1000 feet. The last major blowout resulting in oil coming ashore occurred in 1969. In the ensuing 40 years up to Macondo, 1800 barrels of oil were spilled in the Gulf of Mexico due to blowouts, and a total of 530,000 barrels were spilled from other causes, out of 17.5 billion barrels of crude oil and condensate produced in U.S. federal waters. Meanwhile, our government all but ignores the job losses caused by their actions. What about the 100 or so people who die each day on our nation’s highways, or the millions who die each year in Africa from malaria because our government refuses to lift its ban on DDT? Etc. On the other hand, it is imperative that the entire offshore industry use this Macondo incident to totally commit to policies that insure all offshore activities are carried out as safely as humanly possible.
One key safety requirement of the new BOEMRE regulations has been met. The Helix Well Containment Group, a cooperative of 24 oil and gas companies, unveiled two new containment caps that are designed to quickly halt a subsea well blowout similar to the BP Macondo event. The first cap, capable of sealing a damaged well at pressures up to 10,000 psi, was completed in February 2011, while the second, 15,000-psi cap, was completed in June 2011. These new containment caps are stored in North Houston, and reportedly could be transported to any deepwater well blowout site in the Gulf of Mexico in less than 48 hours, where one of these caps would be installed onto the leaking subsea tree using a pre-tested deployment plan.
It should be noted that just over a year after the Macondo oil spill, very little evidence of the oil spill remains. In spite of the 6000 birds killed by the spill, and in spite of the huge numbers of oil production jobs lost throughout the region, the beaches in Mississippi, Alabama, and Florida are again in pristine condition and open for business, and the marshes are again supporting thriving populations of pelicans, gulls, herons, ibises, egrets, and royal terns. The hysterical coverage of the bird kills in the aftermath of the Macondo blowout, contrasts starkly with the estimated 400,000 birds and bats killed every year by the 15,000 or so wind turbines located across the U.S. Why are these bird kills never mentioned in the press?
Endangered Species Act
The Endangered Species Act (ESA) is being used increasingly by our federal govern-ment to halt various existing or proposed productive enterprises.
Consider the population of polar bears, living along the shores of the Arctic Ocean and surrounding waters, which has grown from less than 10,000 bears 30 years ago to about 25,000 bears today. While parts of this population have decreased somewhat in areas where hunting of bears occurs, elsewhere the numbers are increasing or holding steady. Yet, in 2007, the U.S. Department of Interior added the polar bear to the Endangered Species List, ostensibly because the survival of this species appeared to be threatened by shrinkage of summer ice cover in the Arctic Sea. At the time, this loss of ice was said to be caused by global warming, but the ice sheet has since increased by more than 20 percent. Of course, the real victim here is the petroleum industry, since this ESA listing gives the government additional leverage to prevent development of all potentially oil-rich properties along Alaska’s North Slope, including the Arctic National Wildlife Refuge.
Consider also the Permian Basin, which produces nearly 20 percent of all domestic crude oil, and which supports tens of thousands of jobs in west Texas and eastern New Mexico. The Permian Basin is now under threat of being shut down by a three-inch long sand-dwelling lizard. The dunes sage-brush lizard has been under study since 2002, and may soon be added to the Endangered Species List by the U.S. Fish & Wildlife Service. If the lizard is so listed, the Endangered Species Act will impose severe land use restrictions on the 17-county Permian Basin, including curtailing further exploration and drilling across this area. Officials at the Fish & Wildlife Service are expected to make a final decision on the lizard by December of this year. Hopefully this issue can be resolved without loss of jobs.
Although not related to petroleum, the sad story of California’s San Joaquin Valley deserves re-telling. Here is the story (Ref. 4) as related by Congressman Devin Nunes, who represents the San Joaquin Valley district in the U.S. Congress. Settlers in the 1920s and 1930s, worked with state and federal officials to build an advanced irrigation system that was the envy of the world, with canals and reservoirs throughout the valley to irrigate about four million acres of farmland. Combined with fertile soil and ideal climate, the water helped to make the valley the most productive agricultural region in the entire world. It stayed that way for 50 years, until the valley was destroyed in a failed attempt to create a socialist utopia.
First, in the early 1990’s, President Clinton put the timber areas off-limits by declaring them a national monument. Then, ever-stricter state and federal air quality regulations drove out much of the valley’s industries, including their once-thriving trucking business. Finally, the radical environmentalists declared war on the valley’s water supply – denying water to the thousands of people living in the valley. In 1992, under intense lobbying, Congress passed the Miller-Bradley Act, which diverted more than a million acre-feet of water away from the valley’s farms to environmental projects and wildlife refuges. In 2009, after years of litigation, citing the Endangered Species Act, the environmentalists succeeded in diverting the remaining water from the San Joaquin valley, to simply be flushed out under the Golden Gate Bridge – for the purpose of protecting three fish species including the infamous Delta Smelt, a three-inch bait fish. Opposing farming, fishing, lumbering, energy, and nearly all other economic activities, green utopians want the San Joaquin Valley to revert back to a desert – and they have just about achieved their goal. Hundreds of thousands of acres of fertile land now lie fallow, and the stunned local families are left to wonder why their government chose to support a handful of fish instead of them.
Other similar Endangered Species Act assaults include FWS’ use of the spotted owl to decimate the lumber industry in Washington and Oregon, and use of the snail darter to retard hydroelectric projects in Tennessee. That the spotted owl was actually killed off by a more aggressive species of owl, was small consolation to out-of-work lumbermen.
Western States Land Grab
The U.S. Federal Government has been buying up land across the western states, particularly those rich in oil, gas, coal, and various minerals, and are actively employing various schemes to render economically productive lands off-limits to development of energy and mineral resources. For example, in 2000, then President Clinton designated 19 new National Monuments encompassing 5.6 million acres, primarily to fend off oil and gas development. The federal government now owns between 40 and 60 percent of the land area of Arizona, Nevada, Utah, Idaho, Wyoming, Montana, and North and South Dakota, as well as more than 90 percent of Alaska.
In Utah, over the past several years, the federal government has been locking up lands as soon as natural resources were discovered there. This all climaxed in February 2009, when, after seven years of environmental review, U.S. Interior Secretary Ken Salazar withdrew 77 leases for oil and gas exploration. The resulting lost jobs and lost tax revenues, exacerbated by the already difficult recession, infuriated Utah policy makers. Fed up with the government taking away the state’s own productive resources, in early 2010, Utah Governor Gary Herbert signed a bill authorizing the state to use eminent domain to seize federal lands and open them for development. The intention is to wrest control of certain tracts away from the federal government, then sell the property to private parties, and collect the tax revenues created by the resulting energy and mineral developments.
Eminent domain targets in Utah included the Wasatch Mountains, desert land near Arches National Park, a proposed wilderness area in desert country near the Nevada border, and the Kaiparowits Plateau in Staircase Escalante National Monument, which was designated a National Monument in a controversial last minute executive order by the Clinton administration. According to State Representative Christopher Herrod, a sponsor of the eminent domain bill, the Kaiparowits Plateau alone contains a trillion dollars’ worth of natural resources, primarily low-sulfur coal. Energy production in the plateau alone would provide $50 billion for the state’s school trust fund. Herrod and his colleagues hope their actions will encourage other resource-rich western states to launch similar eminent domain cases against the federal landlord in Washington. Needless to say, government lawyers and environmentalists have filed suits against the Utah law, and thus have the eminent domain bill tied up in court at this time.
In April 2010, the Utah House and Senate also passed resolutions opposing the federal government from designating any new National Monuments within the state without the state’s consent. The resolutions were a response to a Department of Interior memo identifying two sites in Utah among 14 potential new National Monuments. Utah legislators are concerned that the desire to shut down energy production motivates these National Monument designations, since Cedar Mesa and San Rafael Swell both contain significant energy resources. There would be significant job losses if these monuments were moved forward without public input. Such designations would harm recreation, ranching, energy production, and future tax revenues for local communities, said Congressman Rob Bishop.
In February 2010, Wyoming Governor Dave Freudenthal wrote a letter to Interior Secretary Ken Salazar, indicating that government proposals to give environmental activists more power to block oil and gas exploration on public lands will do more harm than good. The new proposals would add three layers of environmental analysis to the already lengthy and expensive environmental review process that must be undertaken before federal lands can be leased for exploration purposes. The proposed changes hand significant control over the exploration and production of oil and natural gas to the whims of those who profess a “nowhere, not now, not ever” philosophy to surface distur-bances of any kind, Freudenthal explained. A large part of the Wyoming economy is based on oil and gas, and a lot of that comes from federally owned land. We favor the relaxing of restrictions on oil and gas development because we realize it pays for our government. The impact of federal restrictions is indicated by the number of active rigs, which decreased from about 80 in January 2008, to 37 in January 2010.
In June of 2010, the Bureau of Land Management halted all oil and natural gas lease sales on federal lands in Montana, North Dakota, and South Dakota, while it conducts a study of how the leases might contribute to global warming. This was in response to another last minute executive order by President Clinton in 2001, stating that the Department of Interior must consider and analyze the potential of climate change when making resource management decisions. Kathleen Sgamma, director of government affairs at the Independent Petroleum Association, said that this decision to halt oil and gas lease sales is an example of the Obama administration using a secretarial order to regulate greenhouse gas emissions in absence of regulations from the Environmental Protection Agency or the U.S. Congress. She added that the lease-sale cancellation will cost jobs and strangle economic development throughout Montana and the Dakotas, particularly across the prolific Bakken Shale field which is estimated to hold as much as 3.6 billion barrels of oil.
In the fall of 2010, Wyoming Governor Dave Freudenthal began a bipartisan challenge against the secretive nature of bureaucratic planning regarding federal lands in the state. The Bureau of Land Management, which controls how federal lands are used, refuses to open its decision-making process to the public, and Wyoming residents are outraged about it. The BLM is refusing to allow the public to attend its sessions where Resource Management Plans are drawn up. In a state where the federal government owns most of the land, Research Management Plans determine how millions of acres of public lands are used. Such decisions affect, among other things, oil and gas exploration, off-road vehicle use, and habitat management, which bear directly on the economic viability and quality of life of Wyoming’s local communities. The BLM’s secrecy is in complete disregard of the 1972 Federal Advisory Committee Act, designed specifically to prevent such secretive, back-room discussions, committees, and commissions.
In September 2010, Wyoming’s congressional delegation in Washington sent a letter to Interior Secretary Ken Salazar expressing their concerns about an internal Bureau of Land Management memo that identified 13 million acres nationwide, including some in Wyoming, that President Barack Obama is considering designating as National Monu-ments. As before, the congressmen feared permanent job losses and reduced tax revenues for their state.
In October 2010, more than 2400 citizens packed a school gymnasium in Montana, to protest the Bureau of Land Management’s push to declare a new National Monument, which would expand federal control of lands in that state. At the meeting the BLM said the monument declaration was merely a rumor – that documents leaked to Congress earlier in the year, referring to millions of acres of potential designations under the Anti-quities Act, were only internal documents and not an official plan. However, western-state citizens, having seen such land grabs happen before, are skeptical about BLM’s denials. That’s how the last takeover of land using the Antiquities Act started, said Carl Graham, CEO of the Montana Policy Institute. Nancy Ereaux, a member of Montana Community Preservation Alliance said it is ridiculous to imagine that government can provide better stewardship of the land than private owners. No government agency, or other organization, has the kind of incentives that a grassroots heritage can give, with parents wanting to pass the land in good shape to their kids.
On 22 December 2010, Interior Secretary Ken Salazar issued Secretarial Order 3310 directing the Bureau of Land Management to inventory, designate, and manage federal lands as “Wilderness Areas.” At issue are some 13 million acres of land across the western states. According to the state officials and congressional representatives, this Secretarial Order represents an enormous leap in the powers of the executive branch to control land use. Order 3310 requires an inventory of all land under the jurisdiction of local BLM field offices for what is loosely defined as “wilderness characteristics.” The definitions are in the hands of the same people doing the inventories, which has state officials and members of Congress concerned that the federal government could use almost any justification for locking up millions of acres of land in western states and putting them off-limits for many possible uses by the citizenry.
A political firestorm against Order 3310 has arisen because of the apparent executive power grab and the way the process has been handled by the Obama administration. A group of 48 U.S. Representatives and nine Senators penned a sternly worded letter chastising the inappropriate expansion of the Interior Department’s power and calling out the administration for concealing from both congressional and public view what they were doing in that order. The letter noted that the Wilderness Act gives Congress, and only Congress, the power to designate public lands as protected “Wilderness Areas.” The Nevada, Utah, and Wyoming Associations of Counties issued a joint resolution to rescind Secretarial Order 3310, stating that “It undermines the established public pro-cess for land-use planning and expressly violates the intent of the Federal Land Policy and Management Act, as only Congress has the authority to designate public lands as “Wilderness.” The resolution also includes the following section:
“The active management of America’s Public Lands to accommodate beneficial multiple uses is essential to the public health, safety and economic vitality of communities across the United States. Public lands that receive special designations are removed from multiple use, and activities vital to the nation are prohibited, including mineral exploration and production, ranching, agriculture, energy generation from renewable resources, mili-tary training, and most types of recreational activities. Revenues generated from public land support critical state and local government services, whereas loss of such revenues would further cripple the economies of local communities and place unnecessary new burdens on state and local government and school budgets.”
Not mentioned above but also relevant, is the administration’s continuing moratorium on mining and processing of the massive oil-shale deposits located in Colorado, Wyoming, and Utah. Estimates of these reserves exceed 800 billion barrels of crude. Also not mentioned are the continuing moratoria on oil and gas drilling in Alaska and offshore the Atlantic and Pacific coasts of the continental U.S., as well as the disposition of the oft-delayed 1700-mile expansion of the Keystone pipeline for delivering crude from Alberta’s oil-sands to refineries in Texas. It is impossible to know how these protracted battles between Obama’s Interior Department versus the people and the officers of the various states, will be resolved. One can only hope that reasonable voices will prevail in the end, allowing access to our nation’s most abundant and economical energy resources.
Environmental Protection Agency Over-Reach
For more than 35 years, the U.S. Environmental Protection Agency effectively fulfilled its mission to implement the Clean Air Act and the Clean Water Act across America. The changes wrought by the EPA, beginning in 1971, in cleaning up the air in our cities and in cleaning up the lakes and rivers across our land, are nothing short of miraculous. These changes are especially noticeable to anyone who lived over a period of many years in Pittsburgh, New York, Houston, or Los Angeles.
However, in the last few years, the EPA bureaucrats have extended their rulemaking authority well beyond their mandate to secure and maintain clean air and water. Largely at the behest of the Obama administration, and directly in conflict with the wishes of the U.S. Congress, EPA is now actively engaged in regulating greenhouse gas emissions from both moveable (vehicular) and stationary sources (power plants, etc.). In 2009, the Democrat-controlled U.S. House of Representatives passed a Cap & Trade Bill designed to gradually reduce the emissions of carbon dioxide from our industries. However, the U.S. Senate refused to pass the measure, and, after the 2010 elections, any such bill to restrict carbon emissions would never pass either house of Congress. So, in May 2010, without even consulting their internal experts on global warming, the EPA listed CO2 as a hazardous pollutant. Inexplicably, in early 2011, the U.S. Supreme Court gave EPA a green light to proceed in controlling CO2 and thus all energy produced by fossil fuels.
Regarding vehicular regulations, the EPA has signaled it wants to bypass the existing Corporate Average Fuel Economy (CAFÉ) standards, and impose a 56.2 miles per gallon (mpg) average fuel economy for the 2017-2025 model years. While the auto industry is on track to meet the congressionally approved standards of 34 mpg for the 2012-2016 model years and 35 mpg by 2020, the more restrictive EPA standards would impose inordinate hardships on our economy, by raising the price of all vehicles and by eliminating pickup trucks and other large non-commercial vehicles from our highways.
In late 2010, the EPA issued a 946-page book of air quality regulations that impose stringent new limits on the emission of carbon dioxide, methane, ozone, nitrous oxide, sulfur dioxide, sulfur hexafluoride, and hydrofluorocarbons, as well as reduced levels of mercury and fine particulates, from the smokestacks of power plants, refineries, and various manufacturing facilities across the U.S. The regulation of carbon dioxide is particularly onerous, as it has proven extremely difficult to sequester carbon dioxide from power plant emissions. Already, at least a dozen existing coal-fired power plants have shut down, and dozens more proposed coal-fired power plants have been canceled, as a direct result of the high costs required to meet the new regulations. The American Electric Power utility estimates that by 2020 these EPA proposals could cause closure of 25 percent of our nation’s current coal-fired generating capacity, the loss of thousands of high-paying power plant jobs, as well as the investment of billions of dollars in capital to replace or retrofit the remaining coal-fired plants.
One may conclude that the new EPA regulations are fulfilling President Obama’s cam-paign pledge to shut down coal-fired power plants and force higher electricity prices. As Obama told the San Francisco Chronicle in early 2008, ”So if somebody wants to build a coal-powered plant, they can; it’s just that it will bankrupt them because they’re going to be charged a huge sum for all that greenhouse gas they’re emitting … electricity rates would necessarily skyrocket.” After two years of frustration with his own government, Obama is sending out the EPA to do the job that he couldn’t get the U.S. Congress to do. The EPA is now hiring more than 200,000 new employees simply to enforce its greenhouse gas regulations.
Incidentally, since 2008, coal-fired power plants reduced their sulfur dioxide and nitrogen oxide emissions by more than 35 percent, and even the U.S. carbon dioxide emissions have been falling, due partly to private sector investment in efficiency and mitigation technologies, and partly because of the slower U.S. economy. This contrasts sharply with the rest of the world, especially China and India, where all such emissions are increasing rapidly.
In addition to the above activities, EPA’s regulatory schemes include:
-- Regulations on wind-driven dust in parts of Utah,
-- Regulations on agricultural dust on our nation’s farms,
-- Regulations on haze in Texas, Oklahoma, and North Dakota,
-- Regulations on radiation in our homes and around our nuclear power plants,
-- Regulations on coal ash from power plants.
As can be seen from this list, the EPA tentacles have extended into many parts of our national economy beyond simply insuring clean water and clean air.
Many of the EPA regulation enforcement efforts are being challenged and opposed by state governments and by the U.S. Congress. In December 2009, Louisiana Depart-ment of Environmental Quality filed an official objection to EPA’s decision to move for-ward with regulation of greenhouse gases, arguing that the constitutionally appropriate procedure would be for Congress to amend the Clean Air Act to specifically address greenhouse gases, rather than through bureaucratic policy changes. In January 2010, the Kentucky House Natural Resources and Environment Committee introduced a reso-lution questioning the science purported to support human-induced climate change, and prohibiting any regulation that limits the emission of carbon dioxide within that state. In February 2010, the Utah House of Representatives overwhelmingly passed a resolution declaring deep skepticism regarding science claims used to support federal regulation of CO2. In the U.S. House, Agriculture Chairman Collin Peterson sponsored a bill to block EPA from regulating greenhouse gases, saying “I have no confidence that the EPA can regulate greenhouse gases under the Clean Air Act without doing serious damage to our economy … Congress should be making these types of decisions, not unelected bureau-crats at the EPA.” Concurrently, Lisa Murkowski and John Rockefeller introduced similar bills in the U.S. Senate.
EPA regulation of greenhouse gases has inspired spirited protests in many states, with particularly strident opposition in Texas. EPA determined in June 2010 that the Texas Commission on Environmental Quality’s flexible air permits program for oil refineries did not meet EPA requirements for protection of health and the environment. In December 2010, the Region 6 administrator announced that henceforth greenhouse gas permitting in Texas would be handled directly by the EPA, rather than by state officials. During a March 2011 field hearing in Houston, Gina McCarthy, EPA’s assistant administrator for the Office of Air and Radiation, characterized Texas as a rogue state defying federal orders. At the hearing, Rep. Pete Olson said, “The EPA has repeatedly exhibited a disturbing pattern of abusing their federal authority in the state of Texas, and it needs to stop.” Rep. Joe Barton added, “We are not engaged in a witch hunt against the EPA, but we do believe the EPA, like every federal agency, should follow the law and not make the law. Ultimately, in this process it is the consumer, American families, who will be picking up the tab for higher costs resulting from EPA’s greenhouse gas restrictions.” Kathleen White added, “Since Texas is now the leading manufacturing state, it will be impacted disproportionately by EPA’s regulatory onslaught.” EPA’s Gina McCarthy countered that greenhouse gas restrictions will encourage rather than stifle economic activity, claiming that they will “result in $2 trillion in economic benefits by 2020.”
The EPA continue to espouse the idea that their heavy handed regulations are good for the economy, while business people in all industries are telling them the opposite – that excessive regulation is among the leading causes for our current economic doldrums and for our industries moving overseas. Numerous states have active lawsuits against the EPA over their efforts to diminish our energy industries. Several Congressmen have recently proposed abolishing the U.S. Environmental Protection Agency and transferring EPA’s functions to our state environmental protection agencies. These state agencies already duplicate much of what EPA is doing and, in fact, do the work better because of their collective wisdom. At least 80 percent of the EPA’s budget could be returned to the people, with the remaining 20 percent used to strengthen the laboratories that once were the focus of EPA’s outstanding environmental research. All these issues remain to be resolved.
Natural Gas Fracking Under Attack
Hydraulic fracturing, or simply “fracking,” is a 60-year old natural gas production tech-nique that, in combination with modern drilling methods, is increasingly being used to produce natural gas from formations where previously it had not been technologically or economically feasible. Developed by Houston’s George Mitchell, the modern fracking technology utilizes large volumes of water and sand, and trace amounts of chemicals, to release underground deposits of natural gas from shale rock and other “tight” deposits. Coupled with horizontal drilling, fracking has made possible the extraction of natural gas in much greater amounts and at much lower cost than was possible only a few years ago. Fracking has vastly expanded the nation’s gas reserves, and has brought jobs and prosperity to many depressed areas across the country.
According to FBR Capital Market, since 2006, shale gas production in Pennsylvania has created 72,000 jobs, has generated nearly $15 billion in revenues, and has paid a large fraction of that revenue to the state in taxes, and to the landowners in lease and royalty payments. While drilling-friendly states such as Texas, Pennsylvania, Ohio, and Michi-gan are reaping huge economic benefits from the fracking revolution, other states such as New York and Maryland, and even some local county governments, have enacted gas-drilling moratoria due to fears of possible environmental damage.
The Barnett Shale, encompassing about 5000 square miles in north central Texas, grew from about 3000 wells in 2003 to more than 17,000 wells in 2010, with total production now exceeding five billion cubic feet per day, the equivalent of about one million barrels of oil per day. In April 2009, the Energy Information Administration (EIA) estimated the Barnett’s recoverable reserves to be 44 trillion cubic feet (TCF). Although impressive, the Barnett Shale is dwarfed by the Marcellus Shale, which covers more than 50,000 square miles across New York, Pennsylvania, West Virginia, and adjoining states, and contains some 262 TCF. Also dwarfing the Barnett is the Haynesville Shale, primarily underlying Louisiana, which contains about 251 TCF. Including five other shale basins, the EIA estimated the total recoverable shale gas and other “tight gas” in the United States to be 649 trillion cubic feet, out of a total U.S. natural gas resource of over 2000 trillion standard cubic feet. These 649 TCF recoverable gas reserves are the energy equivalent of 118 billion barrels of oil, or about four times America’s proven oil reserves.
In order to produce such large quantities of shale gas, companies must drill large num-bers of wells in relatively close proximity and, because of high depletion rates, must keep drilling more wells year after year. Drilling of each fracked gas well requires about two million gallons of water, mixed together and pumped downhole with about 2000 tons of sand and about one percent proprietary chemicals. The chemicals function primarily to lubricate the sand-water mix. Much of the recovered water is re-used on the next well, although some may be injected into a disposal well.
As fracking use has grown, so have complaints about it. In recent years environmental activists rallied the troops to produce a bogus documentary film “Gasland,” a sloppy Cornell University “study,” and reams of new EPA regulations to stymie shale gas pro-duction. While opponents have attacked possible air and water pollution at the drill sites, and even emissions of the trucks carrying supplies, the main focus of complaints has been that the fracking process poses a threat to the nation’s water supply. (Note that most water-supply aquifers are no deeper than 1000 feet, whereas almost all shale gas deposits lie deeper than 6000 feet below surface.) Despite many anecdotal claims of water and air pollution associated with fracking, all serious studies of these questions, including separate studies conducted by the Ground Water Protection Council, the Interstate Oil & Gas Compact Commission, and a four-year study by the Environmental Protection Agency, found no link between the fracking activity and the quality of drinking water in the area.
Many specific cases have been investigated. One such case, in early 2010, involved claims by a Colorado ranch owner that nearby gas drilling polluted his aquifer and drink-ing water. Colorado Oil and Gas Conservation Commission conducted a comprehen-sive study which concluded that the drilling operations undertaken by Pioneer Natural Resources in Las Animas County, did not cause any water pollution as claimed. In a similar case, less than a week later, Texas homeowners blamed Range Resources’ two Barnett Shale wells for contaminating their residential water wells in Parker County, TX. The U.S. Environmental Protection Agency stepped in and ordered Range Resources to take immediate action to protect the homeowners from gas-contamination of their wells. Range fought the order, claiming that the contamination could not have come from them. The Texas Railroad Commission studied the issue and found the contamination most likely came from a separate source of shallow gas near the water wells.
As another example, in 2008 and 2009, environmental activists asserted that gas wells being drilled in the Fort Worth Texas metropolitan area were endangering public health and should be shut down. In response to these assertions, the Texas Commission on Environmental Quality studied the environmental effects, and reported in January 2010, that producers are complying with state air and water health standards. Results for 144 Barnett Shale gas production sites, each tested for 22 different toxic chemicals, showed that none of the sites exceeded short- or long-term health and safety standards. At the request of the Fort Worth City Council, an additional large-scale million-dollar study of air quality was carried out by Massachusetts-based Eastern Research Group. Researchers sampled the air quality around 388 natural gas sites, including 1000 active wells and 1200 storage tanks. While pollutants with relatively low toxicity (methane, ethane, etc.) were found to be emitted at various locations, the measured air pollution did not reach levels to cause adverse health effects, and levels of benzene and formaldehyde were not elevated when compared to levels measured elsewhere in Texas.
In addition to the accusations of pollution by environmentalists and others, and the many studies absolving the drillers – hundreds of federal, state, and county governments have been busy enacting laws and regulations to control the drilling of shale gas wells. These growing numbers of laws and regulations are targeting primarily quality of air and water in an around the wells; how to insure integrity of the wells; how to clean up spills; and how to procure, handle, and dispose of the large quantities of water required in the fracking process. Also, some state legislatures are currently debating imposing direct extraction fees on each well. One expert has estimated that the impact of such regula-tions and laws may soon exceed $150,000 per well, which, of course, will inhibit the number of wells being drilled.
Nuclear Power in Chains
Without causing any pollution or trouble to anyone, the 104 domestic nuclear power plants have steadily been producing between 18 and 20 percent of our nation’s electrical power since the last nuclear plant was built in the early 1980s. They have maintained the same percentage of the energy pie, in spite of growing numbers of coal- and natural gas-fired plants, primarily by increasing their capacity factor from about 60% in 1975 to about 90% today. “Capacity factor” is the percentage of power generated as compared to the design value if the plant were running at full output every day of the year. Main-tenance and refueling now occupy most of the 10% down time. Almost all these 104 nuclear plants are now completely paid-for through their sales of electricity, and most produce electricity at very low costs, 1.5 to 2.0 cents per kilowatt-hour. All provide high-paying jobs and substantial tax revenues for their local communities.
On March 28, 1979, while the movie “The China Syndrome” was playing in theaters around the country, Unit 2 of the Three Mile Island Nuclear Station near Harrisburg, Pennsylvania, experienced a partial meltdown of its nuclear core - due to a faulty relief valve, a poorly designed control system, and insufficient training of the plant operators. In response to this incident and to criticism from all sides, the Nuclear Regulatory Commission (NRC), piled endless regulations onto the nuclear industry, until it was no longer economical to operate existing nuclear plants, much less to build new ones. Fines were increased and plants were shut down for the smallest infractions. When cracks appeared in the pipes at one plant, all plants were closed for weeks until all had been inspected. By 1990, the time from receiving a construction license to receiving an operating license was averaging 14 years and several projects took more than twenty.
Environmental activists and other fear mongers also stymied the building of nuclear power plants within the United States by linking them to fears of nuclear bombs – this in spite of the fact that it is impossible for reactor-grade nuclear fuel with only 3-4 percent U-235 to explode, and in spite of the fact that there has never been a fatality at a nuclear plant within the U.S. (Note Bomb-grade uranium contains more than 90 percent of the fissionable uranium isotope U-235.) In fact, other than the Chernobyl plant explosion in Russia in 1986, which killed 54 people, there has not been a radiation-related fatality in any of the 440 nuclear power plants operating worldwide. Contrast this safety record with the mining and production of fossil fuels, in which people are killed every year, or with hydro-electric power where people have been killed in the construction of the dams. Although any large-scale energy conversion industry contains an element of danger, they all save far more lives than they consume.
While the Three Mile Island incident was a huge setback for the nuclear industry, it also spawned revolutionary changes in the layout of plant control systems and in the training of operators for the entire fleet of nuclear power plants in the U.S. and for many plants around the world. Because of these changes, a serious accident of the type that occur-red at TMI is much less likely to occur today. In recognition of the improving safety re-cord of the U.S. nuclear power industry, in 2009 and 2010, for the first time in decades, the Nuclear Regulatory Commission began accepting license applications from utilities, and federal government officials began talking about extending loan guarantees for the building of new nuclear power plants. Even university programs in Nuclear Engineering began growing after a long hiatus. The federal government’s response to this budding renaissance of nuclear power occurred on May 3, 2010, when Department of Energy Secretary Steven Chu, filed a motion to permanently abandon Yucca Mountain – the nation’s $10 billion repository for spent nuclear fuel – a big slap in the face against nuclear power.
Among the first of seventeen utilities applying to the NRC, San Antonio’s City Public Services developed plans and secured necessary financial support for construction of two additional 1350 megawatt reactors at the South Texas Project in Bay City, Texas, and submitted these plans to the NRC in Sept. 2009. Then, on March 11, 2011, Japan’s Fukushima nuclear complex was severely damaged by a magnitude 9.0 earthquake and resulting series of huge tsunami waves – the worst in the history of Japan. These tsu-namis killed an estimated 18,000 people along the northeast coast of Japan, and lead to core meltdown in three of the four Fukushima nuclear reactors. While there were no radiation deaths recorded, six months after the incident the damage to the nuclear plant was placed at level 7, the same as for the Chernobyl disaster. It may be years before the plant site can be re-used.
Needless to say, the Fukushima nuclear plant disaster immediately stopped all plans for building new nuclear plants in the U.S., with very little chance of even replacing the plants that will be retired over the next decade or so. Meanwhile, there are more than 50 nuclear reactors now under construction around the world, and at least 150 more in vari-ous stages of planning, in countries that include China, Russia, Japan, Korea, Taiwan, India, Iran, Italy, France, Finland, Canada, Nigeria, Brazil, Venezuela, and Abu Dhabi. China is now building three nuclear plants a year, and Russia and India are each build-ing two plants per year, yet there are none being built in the United States. As a nation, we have let irrational fear of radiation, a natural phenomenon in which each person is literally bathed each day, to deny our people the cheapest, most abundant, and most long-lasting source of real energy – atomic fission – also probably the most important scientific discovery of the 20th century.
In fact, the EPA regulations on radiation, like those on carbon dioxide, are based on faulty science, and are a major reason why nuclear power plants built in the U.S. are so expensive. EPA requires virtually no detectable radiation outside any nuclear power plant building or at the boundaries of the power plant properties. These very strict rules contrast with the results of hundreds of studies showing that small-to-moderate amounts of radiation are actually beneficial to human health, even as large amounts of radiation can cause illness or death. For example, in one study, University of Pittsburgh professor Bernard Cohen undertook an exhaustive comparison of radon gas levels and lung cancer rates in 1,729 counties that included 90 percent of the U.S. population. Cohen’s paper, first published in 1995, conclusively showed that incidence of lung cancer varies inversely with radon exposure. Counties with the lowest radon levels were found to have lung cancer rates 30 percent higher than counties with the highest radon levels. Cohen wrote “Our study has tremendous statistical power, including effectively nearly a million lung cancer deaths and 20 million deaths from other causes.”
Other studies showed that cancer mortality rates in Idaho, Colorado, and New Mexico are 20 percent lower than those in Louisiana, Mississippi, and Alabama, where back-ground radiation levels are only one-fifth the levels in the mountain states. Yet, in 1998, the National Research Council issued a major report on the presumed dangers of radon, stating, without evidence, that “there is no safe level of radon – any exposure poses some risk of cancer.” This report provided EPA with necessary support for its continued use of the “linear-no-threshold” hypothesis. On this basis EPA launched a $100 million initiative to reduce household radon exposure. Many homes now cannot be sold without undergoing expensive radon abatement. Similarly nonsensical is the refusal of the Food and Drug Administration to approve the sterilization of most foods by radiation.
The Myth of Green Energy
For several decades now a movement has been under way to replace our abundant and affordable fossil and nuclear energy sources, with “renewable” or “green” energy sources – primarily wind, solar, and biofuels, but also including geothermal, ocean waves, and tides – which supporters believe can provide endless supplies of energy, while at the same time causing less harm to the environment. Interestingly, hydro-electricity generally is not accepted as a green energy source, because environmental activists dislike the hydro-dams for their disruption of fish migration and because their upstream lakes displace wildlife and human settlers. What green energy supporters do not comprehend (or refuse to acknowledge) is that the so-called green energy sources, often called “piddle power” or “fairy dust” by critics, are incapable of replacing our conventional energy sources, are grossly expensive, and are actually more harmful to the environment than conventional fossil and nuclear power.
The green energy movement has been fueled by government subsidies, starting with President Carter’s Energy Tax Act of 1978, which gave an exemption of 4 cents-per-gallon from the federal excise tax for gasoline blended with 10% ethanol. Also, Carter’s Energy Policy Act of 1979, for the first time, provided generous tax credits for wind power projects. Among the results of this latter act are the more than 1000 large wind turbines, scattered across 70 square miles of the Altamont Pass, 50 miles east of San Francisco – which are responsible for killing hundreds of Bald Eagles, Golden Eagles, and California Condors, as well as approximately one million other birds.
These subsidies have continued through the years and have expanded to include all green energy sources. For example, the gasoline-ethanol exemption mentioned above has now grown to 52 cents per gallon, and has resulted in diverting 40 percent of the entire U.S. corn crop into ethanol production. This huge consumption of corn for fuel has caused world food prices to rise and has contributed to increasing hunger in the poorest countries around the world. Another problem with corn ethanol is that the net energy gain, after subtracting off the fossil fuel used to plant, fertilize, irrigate, harvest, ferment, distill, and transport this product, amounts at most to 20 percent of ethanol’s total energy content. Finally, the 700,000 barrels per day of ethanol now consumed as transportation fuel, has not and will not make a dent in our 18 million barrels per day oil consumption, since it takes nearly one gallon of oil equivalent to make one gallon of ethanol.
The Obama administration has been particularly generous, doling out over $100 billion of our tax dollars in direct subsidies, loan guarantees, and tax credits to green energy industries, including more than $7 billion each year for corn ethanol. The gasohol blends would likely disappear if such subsidies for corn ethanol were removed. Also, up to now there have been no free-market incentives for utilities to build either solar or wind power. All such facilities in the United States are being built entirely with government tax credits or to fulfill mandated renewable energy portfolios. And yet, after 30 years of government subsidies, the green energy sector remains miniscule. As indicated in Table 1, on the last page of this report, in 2008, solar energy produced just 0.003 percent, wind energy produced just 0.187 percent, and corn ethanol produced 0.831% (gross not net), of the U.S. primary energy consumption, whereas hydro-electric produced 2.44%, nuclear power produced 8.27%, and fossil fuels together produced 88.27% of the U.S. primary energy consumption.
Regarding environmental impact, it should be noted that a typical fossil- or nuclear- fueled power plant, capable of continuously producing 1000 megawatts of electrical power, occupies about one square mile (640 acres). In contrast, a field of photovoltaic solar panels capable of producing average power of 1000 MW would occupy more than 50 square miles, and a wind farm of 1000 MW average power would occupy more than 200 square miles. Finally, the amount of land required to produce corn ethanol with the energy equivalent of 1000 MW for one year, would be a staggering 7700 square miles. Even including land required for mining and transporting the fossil or nuclear fuels, the ratios of land use for solar, wind, and ethanol in comparison with conventional power are large (more than 15, 50, and 1000, respectively). Obviously, such land is valuable, and if occupied by green energy producers, would no longer be available for other uses.
The main problems with wind energy and solar energy are their high cost and their inter-mittent power production. Overall, wind energy is approximately five times as expensive and solar energy is approximately ten times as expensive as power from coal. The inter-mittency of wind and solar makes them basically incompatible with the national electrical grid which requires very steady voltages to be maintained at all times. Because wind is seldom optimum, and often stops blowing altogether, a wind farm normally produces power only 20-30 percent of the time, and energy production time can drop to below 10 percent on hot summer days. Similarly, because solar energy varies throughout the day, and stops completely at night or when the sky is heavily overcast, a solar power plant also normally produces power only 20-30 percent of the time. One exception is a ther-mal-solar plant which has a central tower surrounded by a large field of directed mirrors or heliostats. For this type of plant, heat energy is stored in a large tank of molten salt, which drives the generators and enables a fairly constant output of electrical power when weather conditions are favorable.
In general, to supply steady electrical power, each wind farm and each solar power plant must be backed up by some independent power source, usually a bank of gas-turbine generators, which can decrease power when the wind or solar power goes up, and can increase power when the wind or solar power goes down. A recent study of wind farms in Denmark, Germany, and the U.S. (Ref. 9), determined that introduction of wind power into a national grid, beyond about five percent of the total power consumption, actually increases the use of fossil fuels and increases the emission of carbon dioxide into the atmosphere, owing to the inefficiencies incurred by frequently changing the power levels of the backup power plants.
Even with backup gas-turbine power, the fluctuating nature of wind energy is not easy to incorporate into the national grid. For example, in Denmark, which has sufficient wind turbines to theoretically supply more than 20% of that country’s needs, only about four percent of Denmark’s regional electrical power consumption is provided by wind. The remainder is exported to continental Europe. Furthermore, in Texas, which has enough installed wind capacity to supply approximately 14% of that state’s electrical needs, at this time wind produces less than one percent of Texas’ total electrical power. There-fore, due to its inherent power fluctuations, wind power contributions to an electrical grid seem to be limited to a few percent of total power, which is in direct conflict with state mandates requiring much higher percentages of renewable energy.
For wind farms or solar power plants to actually become grid-friendly power sources, there must be some means to store large quantities of electrical energy, which would act as a buffer to smooth out the power fluctuations that are characteristic of these facilities. The most promising candidates are pumped water storage, compressed air storage, giant chemical batteries, and hydrogen fuel cells. Unfortunately, none of these options have been developed to the point where they can handle sufficiently large amounts of electricity, and none are likely to be available any time soon. One expert observed that, if such large-capacity electrical storage devices ever become available, they would be more valuable as an adjunct to conventional base-load power plants, where they would compensate for daily fluctuations in the demand for electrical power, while enabling the base-load plants to run at their most efficient steady power levels.
A typical large-size wind turbine produces about 1.5-2.5 megawatts under optimum conditions, and costs about $4-6 million dollars, thus providing electrical power roughly in line with a fossil-fueled power plant. However, the above costs do not include the significant costs associated with long distance transmission of electricity from the wind farms to the centers of population, or the additional costs of backup power plants and/or electrical storage systems, or the land on which the wind farms are built. For example, the approximately 4000 wind turbines in Texas cost approximately $20 billion, backup power plants for these turbines cost $10-15 billion, transmission lines cost at least $7 billion, and land costs (royalties) are similarly large, providing a total investment 2 - 3 times the cost of the wind turbines themselves. Hence, while wind turbines by them-selves may appear to be cost competitive, considering all the additional costs and taking into account the fact that the system produces power only 20-30 percent of the time, the total cost of a wind power system definitely is not competitive with a conventional power source. Additionally, wind turbines installed offshore cost at least three times those installed onshore.
Common sense suggests re-directing existing wind farms (and perhaps also existing solar plants) to power local, off-grid applications, such as pumping well water to irrigate crops in the area, or desalination of sea water for wind turbines near the ocean, etc. Such realignment of purpose would enable the intermittent wind turbines to be utilized at their full power capabilities, while avoiding expensive backup power plants, energy storage systems, and cross-country electrical transmission lines.
Beyond intermittency and high cost, other disadvantages of wind power include: (1) the large land area required, (2) the large number (approximately 400,000) of birds and bats killed each year, (3) the noise factor for people who live near a wind farm and suffer from severe headaches and sleep deprivation, etc, (4) the voltage losses associated with long distance transmission, (5) the large amounts of concrete and steel required to construct wind-turbine towers, and (6) the scenic impact, particularly regarding turbines located offshore New England or California, or along scenic mountain ridges, etc.
Electrical power systems based on photovoltaic (PV) solar panels also suffer from very high costs in comparison with the amount of power produced. Consider, for example, a residential rooftop installation which costs $25,000 and which provides approximately 4-8 kW-hrs per day of power, depending on the sunshine. Storage batteries extend the solar power use to evening and night, but the system provides only enough electricity to power internal lighting – no hairdryers, ovens, or air conditioners. The system enables the homeowner to save about 40-80 cents per day on his electric bill. Without subsidies, the payback period for this type of investment is more than 100 years, obviously well past the time the system stops functioning.
Three large-size PV-based power plants have recently been built in the U.S., all with significant financial support from the Department of Energy. The largest of these plants, operated by Florida Power and Light Company, was started up in October 2009. This 90,000-solar-panel station is rated at 25 MW, but averages only 4.8 MW power output year-round. The plant cost $150 million to build, and is sited on 180 acres in Florida. Without subsidies, the payback period for this plant, based on a nominal rate of 10 cents per kW-hr, is approximately 36 years, which does not include the cost to maintain the facility, or the cost of the money required to build it. Even so, the $150 million capital cost cannot be paid back by sales of electricity within its estimated 30-year lifetime. Hence, neither the residential solar power system nor the large-scale solar power plant, can pay back even the construction costs. As with wind power, it is fair to wonder whether our hard-earned tax dollars are being spent wisely by continuing to expand these very expensive so-called green energy sources.
Beyond intermittency and high cost, other disadvantages of solar power include: (1) the large land area required, (2) the continuous labor and water resources required to keep the mirrors and/or solar panels clean, (3) the vulnerability of the mirrors and/or solar panels to the effects of wind and weather, (4) the need for rare lanthanides and other exotic materials required for PV power, (5) the destruction of habitat for desert or swamp creatures, and (6) the scenic impact for nearby residents.
A Robust National Energy Policy
A popular vision of the United States’ energy future is based on increasing reliance on solar and wind energy for electrical production, and on biofuels for transportation. These technologies are not economically viable today, and are unlikely to be viable over the next 20-30 years. If forced upon our population by government mandates and/or massive sub-sidies, the outcome of such “green energy” initiatives will be higher energy prices, energy rationing, and increased unemployment, as is now being experienced in Spain, and to a lesser degree in California, both of which have embraced the green energy myth.
A more robust vision of our nation’s energy future, one that would foster prosperity instead of poverty, is outlined below:
1. Promote industry to build at least 300 new nuclear power plants over the next 50-60 years, together with sufficient spent-nuclear-fuel recycling plants to extract the full energy content of the fuel, as currently practiced in Canada, England, France, Russia, and Japan. These 300 new plants, together with many of the 104 existing plants, could supply 70-80 percent of U.S. electrical power for more than a century into the future. This program must begin now, so that these plants are operational by the time the current boom in natural gas starts to wane.
2. Promote industry to continue expanding production of oil and natural gas by fracking of shale deposits, and continue producing our vast coal resources. These fossil fuel sources would provide interim electrical power generation while our nuclear industry ramps up its capacity.
3. Open all offshore areas, including off the East, West, and Alaskan coasts, and also open the vast expanses of onshore federal lands throughout the western states and Alaska, to drilling for oil and gas. These actions, in conjunction with halting the Federal Reserve’s inflation of our money, would guarantee adequate supplies and lower prices of transportation fuels for all Americans.
As economics dictate, promote industry to convert both coal and natural gas into liquid transportation fuels.
5. Phase out all government subsidies for “green energy” options, including wind, solar, and ethanol, which have proven to be ineffective, uneconomical, and destructive to the environment. None of these so-called energy sources has yet to produce any net energy (i.e. provide revenues after paying for themselves), even while receiving billions of dollars in subsidies over the past 30 years.
6. Because intermittent power sources, at this time, cannot be integrated into the national electrical grid except in small percentages (up to about 5 percent), redirect existing wind farms and solar installations to power local off-grid applications such as pumping freshwater, desalinating seawater, or recharging batteries. Such applications would enable intermittent wind and solar sources to be utilized at their full power capabilities, while avoiding the need to build expensive backup power plants and expensive cross-country transmission lines.
Closing Statement
Following is a quotation from an article by Paul Driessen, senior policy advisor for the Committee for a Constructive Tomorrow. See Ref. 7 below, July 2011.
‘President Barack Obama’s speeches sum up his views on oil, natural gas, and energy prices in just forty four words. “We have less than two percent of the world’s oil reserves. We’re running out of oil. We’re running out of places to drill. We need to end our four billion dollars in annual taxpayer subsidies to oil companies. We need to invest in clean, renewable energy.” As Congressman Joe Wilson might say, “What a pile of manure!”
‘Oil reserves are what can actually be produced at today’s prices, using existing tech-nologies, and under current laws and regulations. America has vast oil, gas, and coal resources – centuries of potential hydrocarbon energy. We have the technology to extract much of this energy, especially at $100 a barrel. What we don’t have are laws and regulations that allow us to do so.
‘If the president were honest he would say, “We’re running out of oil that my administra-tion and our radical environmentalist allies will let this country produce. We’re running out of places where we’ll let companies drill. We have two percent of world oil reserves because we’ve placed most of our nation’s resources off-limits.” If he were honest, he would also say, ”We will demonize, penalize, hyper-regulate, tax, and kill hydrocarbons. But we will mandate and subsidize wind, solar, and ethanol, ignore their environmental and human costs, and extol the measly, expensive, and unreliable energy they produce.”
References
1. William Tucker, Terrestrial Energy, Bartleby Press, 2008.
2. Robert Bryce, Power Hungry, Public Affairs books, 2010.
3. Lamar Alexander, Blueprint for 100 New Nuclear Plants in 20 Years, U.S. Senate
Republican Conference, July 2009.
4. Devin Nunes, Restoring the Republic, WND Books, 2010.
5. Arthur Robinson, Access to Energy, monthly newsletter, Cave Junction, Oregon,
October 2008 through July 2011.
6. Howard Hayden, The Energy Advocate, monthly newsletter, Vales Lake Publishing,
July through October 2011 issues.
7. Environment & Climate News, monthly newsletter, The Heartland Institute, Chicago,
March 2010 through October 2011 issues.
8. Offshore Source – News for the U.S. Offshore Energy Industry, Technologies
Systems Corp., Houston, July through December 2010 issues.
9. Kent Hawkins’ blog on the Web site Master Resource, July 2010.
TABLE 1. U.S. Primary Energy Consumption in 1973 and 2008
1973 2008 1973 2008
Primary million Million fraction fraction
Energy barrels of barrels of of total of total
Source oil equiv. oil equiv. energy energy
per day per day
Oil 16.427 17.762 45.6 % 38.1 %
Natural Gas 11.393 12.063 31.6 % 25.9 %
Coal 6.565 11.346 18.2 % 24.3 %
Nuclear 0.400 3.856 1.11 % 8.27 %
Hydro 1.265 1.138 3.51 % 2.44 %
Corn ethanol n/a 0.387 n/a 0.831 %
Wind n/a 0.0870 n/a 0.187 %
Solar n/a 0.0014 n/a 0.003 %
Total 36.048 46.643 100 % 100 %
TABLE 2. World Primary Energy Consumption in 1973 and 2008
1973 2008 1973 2008
Primary million million fraction fraction
Energy barrels of barrels of of total of total
Source oil equiv. oil equiv. energy energy
per day per day
Oil 55.310 78.881 48.1 % 34.6 %
Natural Gas 21.134 54.746 18.4 % 24.0 %
Coal 31.728 66.346 27.6 % 29.1 %
Nuclear 0.920 12.445 0.80 % 5.46 %
Hydro 5.964 14.409 5.18 % 6.32 %
Ethanol n/a 0.746 n/a 0.327 %
Wind / Solar n/a 0.442 n/a 0.194 %
Total 115.06 228.02 100 % 100 %
Source: Ref. 2, Robert Bryce, Power Hungry, page 332.