America’s Addiction to Oil

I can’t say that I am familiar with the author, but I ran across this post and found it hit the nail on the head with regards to our country’s addiction to oil. I concede it is very short on solutions, but step one is admitting you have a problem first anyway.

Read the article.

Preparing for an Electric Vehicle Future

The Western Governors Association has long been on the front end of energy related issues. Perhaps no surprise given that most U.S. oil and gas production takes place in the 19 states that comprise the organization, not to mention a good portion of renewable energy production as well.

At their winter meeting the WGA is considering how to plan for the infrastructure requirements of electric vehicles – a crucial first step to eliminate the chicken and egg problem of whether to provide charging stations or electric vehicles first. A newly created Transportation Fuels Council will report back to the WGA at the summer meeting next year. We will be greatly interested in their findings.

Western Governors push for long-term transmission planning, infrastructure
for electric vehicles
FOR IMMEDIATE RELEASE
December 16, 2009

San Diego – Western governors, car manufacturers and electric utility representatives meeting here today agreed that electric vehicles will become mainstream only with coordinated, long-term infrastructure planning and development.

The integration of electric vehicles (EVs) to the electric grid was a major topic of discussion on the opening day of the Western Governors’ Association’s Winter Meeting. The governors and panelists discussed current and future efforts that are needed to accommodate EVs and ensure greater numbers can be plugged in without major disruptions to the electric grid.

Governors attending the meeting are Brian Schweitzer (Mont.), Chairman; C.L. “Butch” Otter (Idaho), Vice Chairman; Felix Camacho (Guam); Jim Gibbons (Nev.); Bill Richardson (N.M.); Ted Kulongoski (Ore.); Gary Herbert (Utah); and Dave Freudenthal (Wyo.).

Participating in the discussion were: Mark Duvall, Director of Electric Transportation at the Electric Power Research Institute; Pedro J. Pizarro, Executive Vice President, Power Operations at Southern California Edison; and Tom vonReichbauer, Director of Finance at Tesla Motors. Tesla is one of the few companies that already is producing vehicles, but many automakers are expected to enter the market in 2010.

“Electric vehicles intersect a number of policy issues that the Western Governors’ Association is working on, including decreasing our dependence on oil, reducing greenhouse gas emissions, and ensuring reliability in our electric transmission grid,” said Ted Kulongoski, who moderated the panel discussion. “WGA has taken the stance that it’s better to be proactive rather than reactive on these issues, and finding ways to enable these new vehicle technologies is a step in the right direction.”

In 2008 WGA created a Transportation Fuels Council, which brought together governors’ representatives to examine what states were already doing and what they could do collectively to accelerate the development of alternatives fuels and vehicle technologies. The council produced a report early this year that recommended the Governors pay close attention to the issues regarding the integration of electric vehicles in the grid and the coordination of transportation infrastructure corridors.

“The Western Governors have long been leaders in ensuring that we take advantage of the West’s vast clean energy resources and have been emphasizing the need for responsible, effective, and timely infrastructure planning,” Gov. Herbert said. “By working together to develop infrastructure corridors, we can collaborate with the auto manufacturers to ensure that our efforts are coordinated with new vehicle technologies. We have asked our Transportation Fuels Council to work with the automakers on this issue and report back to us in June at the WGA Annual Meeting.”

The Annual Meeting will be held June 27 – 29th in Whitefish, Montana.

Charging Infrastructure for Electric Cars

Below is a good article about how car makers are approaching the range issue with electric vehicles. It will be interesting to see how this plays out in the end.

Where can I juice up my ride?
Nov 17, 2009
Washington Post
Peter Whoriskey
As their manufacturers see it, the electric cars entering U.S. showrooms as early as next year will be engineering marvels: stylish, battery-operated, zero-emission wonders.
Yet for all their technological prowess, there’s one practical question that unsettles the green dreamers and entrepreneurs alike:
Where, oh, where, can you plug them in?
While most electric cars are expected to be recharged at home, the predicament of a driver who runs out of battery power on the road has yet to be settled, and the issue of “range anxiety” has set off an array of billion-dollar speculations.
On Monday, a coalition of companies that includes Nissan, FedEx, PG&E and NRG Energy issued a report calling for billions of dollars in government aid to support the transition of the U.S. vehicle fleet to cars that run on batteries.
The group is asking for $124 billion in government incentives over eight years including $13.5 billion for tax credits to build public charging stations.
“The public charging infrastructure is really important early on for getting drivers over range anxiety,” said Sam Ori, one of the authors of Electrification Coalition report. “No one really knows how intense it will be. Everyone has pet theories. But consumers need to see that the whole thing works and feel confident in adopting this new technology.”
Indeed, one of the main rivalries in the race to build mass-market electric cars, between the forthcoming Nissan Leaf and the Chevrolet Volt, turns on the different ways that each will address range anxiety.
Nissan chief executive Carlos Ghosn said in an interview Monday that he believes that range anxiety will afflict only a portion of the potential market. For plenty of people, trips of 100 miles or less will be fine.
Thus, the Nissan Leaf is a pure electric vehicle with a battery that will give it a range of approximately 100 miles.
If the Leaf were targeted for all drivers, “range anxiety would be a real issue,” he said. But it only “exists for 30 percent or 40 percent of the market.”
General Motors, meanwhile, has studied range anxiety and seems to have arrived at a different conclusion.
During the late ’90s, it produced about 900 electric vehicles, known as EV1s.
“Our experience with EV1 told us that range anxiety is very real,” company spokesman Rob Peterson said. “It was something the drivers experienced.”
Accordingly, its forthcoming electric car runs on a battery for the first 40 miles, but when the charge runs low, a gasoline engine kicks in. With or without public charging stations, a Volt driver can motor on as long as there is a gas station nearby.
“For a long time, cars have represented a way to move around — freedom,” Peterson said. “Some people are unwilling to accept restrictions to that.”
One critical distinction between the Leaf and the Volt will be price, though neither company has said what their vehicles will cost. Both are struggling to make the price comparable to a gas-powered car.
But Ghosn said that by forgoing the gas engine at the expense of a more limited range, Nissan will be better able to make its electric cars cheaply.
“We are not a maker of electric cars,” Ghosn said. “We are a maker of affordable electric cars. That is the most important thing from the beginning.”
Even so, Nissan and other companies exploring the market for electric cars say it would be very difficult to win over consumers without the benefit of the $7,500 tax credit for people who purchase electric cars.
Ghosn said Nissan plans to sell the Leaf only in countries such as the United States, Japan and France that offer consumer incentives.
Not surprisingly, the Electrification Coalition, of which Ghosn is a member, proposes that at least $75 billion in U.S. government money be used to fund the consumer incentives.
That’s a lot of money to ask of government, the coalition’s Ori said, but it “pales in comparison to the cost of U.S. oil dependence, which has huge environmental, economic and national-security costs.”

Shale Gas – How Much is There?

Tapping into shale for natural gas deposits is not something new in the US. However there has been much talk of somewhat recent drilling technology and how much NG just might be available using new techniques. This discussion has been going on for some time, and it seems very similar to the oil discussion to me. We are likely nowhere near running out of either resource, but that is not the point. The point is that both oil and NG has become increasingly more time and resource consuming to drill and harvest. That still leaves us in a situation where increasing price pressures (not so much present currently with the recession) cause great harm to economic growth.

The following article notes the concern of a gentelman who, whether right or wrong, seems to be closed out of the debate as shale gas becomes a hot item once again. It’s ashame we can’t look at these issues thoughtfully and rationally, in order to get a true picture of the possibilities they hold for the future. A similar example would be the hype over ethanol a few years back. There is nothing wrong with ethanol in my view, (a domestically produced fuel with about the same or perhaps slightly better environmental impact than oil), the problem was touting it as a viable alternative to oil when experts knew it would never account for more than 10-20% of our total fuel use.

Shale or sham?
Nov 13, 2009 Houston Chronicle
Shale or sham?

By LOREN STEFFY Copyright 2009 Houston Chronicle

Art Berman didn’t set out to become the Cassandra of shale gas. That’s simply been the result as the Sugar Land petroleum geologist and consultant has persisted in raising doubts about the hottest play in the domestic energy industry.

Natural gas extracted from shale formations has transformed the U.S. energy outlook, leading to predictions that it could produce as much as half of our natural gas by the end of the next decade. Shale gas, though, requires more expensive drilling techniques to produce than conventional gas. That made shale gas attractive last year, when natural gas was selling for $13.58 per million British thermal units, but it can be a money-loser at today’s prices of less than $4.50.

In a boom-prone industry known for greeting new discoveries with wide-eyed hype, shale gas has unleashed a gusher of zeal, sparking a drilling craze and soaring lease rates across millions of acres from Texas to New York.

Berman isn’t saying that the major shale players — companies such as Chesapeake Energy, Devon Energy and Houston-based Petrohawk Energy — are wrong, but he’s skeptical that shale gas will be the domestic energy boon that the companies claim.

“I’m saying it’s a bubble,” Berman said. “They’re creating an illusion.”

Decline rates disputed

That view puts Berman at odds with a host of energy companies, consultants and investment bankers, who claim shale gas may more than double our domestic supply. They argue Berman’s analysis is flawed.

The two sides disagree on how to calculate the decline rates for the wells. In simple terms, Berman believes that shale gas wells will play out much faster — producing much less gas — than his detractors do. He also believes that many of the wells being drilled in shale won’t be commercially viable.

His conclusion is based on production rates from the Barnett Shale near Fort Worth, the country’s oldest field, which he says show steep and persistent declines. Supporters say the initial declines ease over time and settle into a steady production stream.

In criticizing shale, though, Berman has become something of an Oil Patch pariah.

“I’m being creamed,” he said. “There’s a brotherhood of defenders out there, and they’re all lined up against me.”

A column he wrote for the trade publication World Oil got spiked, and Berman resigned in protest. He claims the shale companies put pressure on World Oil’s publisher to silence him.

‘Time to move on’

John Royall, president and chief executive of Gulf Publishing, said he didn’t receive any pressure from gas companies. World Oil serves a global audience, and gas shale is largely a domestic issue. Berman had written on the topic for a year, and Royall decided that was enough.

“Art had an interesting take on shale gas,” he said. “It was interesting, provocative stuff, but it was time to move on.”

Berman doesn’t come off as obsessed or paranoid. He simply believes that the industry has abandoned caution when it comes to shale, wasting millions drilling wells with a lack of scientific analysis.

“All of my instincts say if you approach it this way, it’s just insanity,” he said.

If he’s right, the insanity could affect us all. As Congress discusses carbon capture and environmentalists champion converting vehicles to run on natural gas, the prospect that gas supplies could be far less than we think could have a profound economic impact on the country.

“My message isn’t ‘this is bad,’ it’s that we need to practice some caution here,” Berman said.

Loren Steffy is the Chronicle’s business columnist. His commentary appears Sundays, Wednesdays and Fridays. Contact him at loren.steffy@chron.com. His blog is at http://blogs.chron.com/lorensteffy/.

Powering our Transportation Fleet with Natural Gas

The following is an op-ed article by Colorado Senator Mark Udall and T. Boone Pickens (of oil fame) touting natural gas as an option for fueling our transportation fleet. It is certainly one option to bridge the gap (which could be many years) from oil to an alternative fuel source. For those interested you can learn more at http://www.pickensplan.com/.

Natural gas should be the vehicle fuel of the immediate futureBy Sen. Mark Udall and T. Boone Pickens
Friday, November 06, 2009
Too often in Congress, and in our political debate, people stake out a position and, in the course of defending that position, refuse to credit anything their opponent is saying. We’ve all seen that.
When it comes to passing a clean energy plan for the United States, we need to take a broader, longer look at all of the tools we have at our disposal to accomplish two very important goals: Enhancing national security and reducing our dependency on foreign oil.
Far from being mutually exclusive, these two crucial goals are complementary and should be understood as goals that are beyond partisan politics. They really are crucial for our country’s future, along with the pressing need we also have to spur job growth and get our economy fueled up.
In spite of all the talk about energy independence since the first “energy crisis” in 1973, we are still importing nearly two-thirds of the oil we use in the United States. Why is this a national security problem? Because we are dependent on that oil from many countries and regions that are unstable or unfriendly to the United States.
Month after month, we are spending about $25 billion to buy foreign oil. Over the course of a year, that may add up to $300 billion. That is money that should be circulating through the economy of the United States, instead of the economies of Saudi Arabia, Nigeria and Venezuela.
To show just how dangerous this situation is becoming, earlier this month CNBC reported that Russia has surpassed Saudi Arabia as “the top crude oil producer in the world, pumping a record 10.01 million barrels of output in September.”
Russia is the largest single supplier of natural gas to much of Europe. Last year, in the dead of winter, in a price dispute with Ukraine, Russia simply turned a valve and shut off supplies to Europe to force the affected countries to bring pressure on Ukraine to settle.
This is where using all the tools in our toolbox comes into play.
One bill making its way through the Senate and the House is the NAT GAS (S.1408) Act, which will help provide tax incentives to change cars and trucks running on imported gasoline and diesel to natural gas.
With recent improvements in the techniques and technology to recover natural gas from the enormous shale deposits under the continental United States, studies indicate we could have natural gas deposits that would last for more than 100 years. This is a sea-change from what we thought our natural gas reserves were prior to being able to utilize these so-called “shale plays.”
Going to domestic natural gas as a principal transportation fuel will also have significant, if not almost immediate, impacts on the U.S. economy. Along with jobs being created in other alternative energy areas, we can produce and/or save thousands of jobs in the supply chain of natural gas vehicles, from the well-head to the manufacturing floor and from sales and distribution to fueling and maintenance.
Seventy percent of the oil we import is used as transportation fuel. We can’t run 18-wheelers on batteries and, while we can and should do more with renewable energy sources like wind and solar, putting fuel in the gas tank is a special challenge. There are over 10 million natural gas vehicles in the world, but only about 130,000 in the United States. Natural gas can be used in virtually any vehicle running on our streets and highways.
Natural gas is cleaner than either oil or coal. In fact, natural gas emits almost 30 percent less carbon dioxide than oil, and just under 45 percent less carbon dioxide than coal. And natural gas produces almost no particulate emissions.
Natural gas can and must be developed in an environmentally responsible way that includes involvement from local communities. But properly developed, it can play a significant role in our energy future.
It is a bridge fuel that can get us to the next era of clean fuels. Natural gas will not last forever, and we will not need to use it forever. But, as a transition fuel, it can help us do our part in cleaning up the planet, it can reduce our dependence on foreign oil and it can provide a real boost for jobs and the economy.
Mark Udall, a Democrat, is the senior senator from Colorado. T. Boone Pickens is chairman and CEO of BP Capital, which operates energy-focused commodity and equity funds.