White House Chronicle

News Analysis With a Sense of Humor

Energy Experts Predict Crisis-Free Winter

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There is something extraordinary happening on Main Street, in the suburban strips, and at country stores: workers are lowering the prices on the signs for gasoline.
Veterans of the energy crisis that began in 1973 and has continued, with perturbations, ever since, are trying to get their heads around this enormous reversal of fortune: there is no energy crisis for any fuel in the United States as winter approaches. That was the message delivered loud and clear at the annual Energy Supply Forum of the United States Energy Association (USEA).
Indeed the main problem, if there is one, is that oversupply is driving down some fuel prices, like for oil and natural gas, which could result in higher prices later as producers curb production.
"Who would have believed it?" asked Barry Worthington, president of USEA.
This year the forum, which has been known to be filled with alarm and foreboding predictions, was full of robust confidence that the nation will breeze through the coming winter, and that consumers will pay less to stay cozy than they have for several winters — but especially the last one. Stocks of gas and oil are plentiful. It is not just that heating oil will be cheaper, nature will also play a part: the National Oceanic and Atmospheric Administration predicts a mild winter.
No one is expecting a repeat of last winter's "Polar Vortex," which brought some big utilities close to being unable to meet customer demand in the extreme cold. Mark McCullough, executive vice president for generating at American Electric Power (AEP), which serves customers in 11 states, described how the giant utility came close to the edge.
This winter, McCullough thinks, things will be fine. But he is less sanguine about the future of AEP and its ability to deliver electricity in 2016 and beyond, if the Environmental Protection Agency holds firm on its proposed rule to curb carbon emissions from coal-fired plants.
AEP, which straddles the Midwest, has the largest coal-fired fleet in the country. McCullough said that his company had just come off extensive efforts with the so-called mercury rule and now was plunged into a very difficult situation.
McCullough was joined by oil producers and refiners in worrying about another proposed rule from the EPA on ozone. Neither the utilities nor the oil producers and refiners feel that the EPA's proposed ozone regulation can be met.
In short, in a buoyant energy world, there are clouds forming. But unlike the last 41 years, these clouds are regulatory rather than resource generated; public policy in their origin, rather than in the scheming of foreign oil cartels. Indeed Robert Strout of BP confidently predicted that in a little more than 20 years, the United States could be energy self-sufficient.
The other problem going forward, in the new time of bounty, is energy infrastructure. The industry needs more pipelines to facilitate the shift from coal to gas; better infrastructure to get the new oil to the right refiners. (Refiners actually favor moving oil by train as well as by pipeline.)
USEA's Worthington, a veteran of energy crises of the past, said ruefully the other thing that might happen is that excessive domestic production and falling prices will lead to a period when producers will stall new production and prices will rise. "Markets do work," he said, commenting on the cycles of the hydrocarbon market.
For now, with international economic activity waning, and hydraulic fracking unlocking oil and gas at an astounding rate, this is a bonus time for the American consumer.
For people like myself, who have spent more than 40 years commenting and reporting on the bleak energy future, this is indeed a time of astonishment. We had heard predictions of doom if China industrialized, expectations of steadily declining U.S. production, and more and more of our wealth being exported to buy energy. Now, if Congress acts, we will be a serious exporter.
This winter of our discontent is made glorious summer by fracking, as Richard III did not quite say. Astonishing! –— For the Hearst-New York Times Syndicate

Can King Coal Be Helped back onto His Throne?

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Forty years on from the Arab oil embargo of 1973, which triggered decades of turbulence in the energy markets, there is a sense of plenty at last. There also is a sense, says Barry Worthington, executive director of the United States Energy Association, that “technology came through.”
 
And it has. Windmills are producing more and more electricity around the globe; the cost of solar energy, particularly rooftop collectors is falling; and there is, above all, enough natural gas and oil to keep a voracious world supplied.
 
In oil and gas there is real technology triumph; the culmination of decades of effort between the government and private enterprise to develop better ways of mapping reserves with 3-D seismic surveys, horizontal drilling, and finally the development and deployment of geological fracturing, known as “fracking.”
 
With this technology, a well is drilled vertically and then two horizontal wells shoot off from the mother well; one for breaking up the rock with sand, water and chemicals, and another for transporting the oil or gas, which has been loosened from shale formations. This technology has revolutionized oil production made the United States — which has abundant oil and gas-bearing shale — a potential gas exporter, and possibly self-sufficient in oil.
 
Forty years ago the energy picture was pretty bleak, and it remained bleak through the decades. The United States was resigned to the reality that it could not be self-sufficient in energy. Natural gas, according to the then Deputy Secretary of Energy Jack O'Leary was a “depleted resource” not worth worrying about. Oil production was declining and consumption was climbing.
 
Coal was the great hope because there was a lot of it and it could burned, made into a gas, and turned into a liquid for transportation. With coal and nuclear — then still a cutting-edge technology — electricity would be the only safe bet.
 
In 1973 climate change was phrase yet to enter the language, and only in obscure academic settings was the possibility of global warming hinted. The rage of what was a relatively new environmental movement was directed toward coal and nuclear. But, for social and political reasons, it settled on a course of hostility — bordering on the psychopathic– to nuclear, which stumbled first in public esteem and then in the marketplace, mostly from costs driven up by delay occasioned by environmental litigation.
 
The world oil picture was changed by technology as well. Not only was extraction better and cheaper and, therefore, could take place in increasingly hostile environments and in very deep water off shore, but oil was discovered in the Southern Hemisphere, where old-line geology had declared it would not exist.
 
The challenge now, as seen by Energy Secretary Ernest Moniz, is to make the burning of fossil fuels more environmentally benign; to reduce the emission of greenhouse gases, especially carbon dioxide. Moniz was at a ministerial conference in Washington on Nov. 7 to push for the capture of carbon from coal plants, the most intense emitters. This embryonic technology, known as “carbon capture and storage,” removes the carbon dioxide from the effluent streams chemically. Then it is compressed to a liquid and pumped into geological formation for storage. In time, scientists believe it will eventually harden and become part of the earth that hosts it.
 
Twenty-three nations were in Washington for the meeting and to hear Moniz spur them on to greater effort; to catch the wave of technological euphoria and to see if King Coal, now under attack by environmentalists and by the U.S. Environmental Protection Agency, can be helped back onto his throne.
 
Since 2009, according to Moniz, the United States has committed $6 billion to carbon capture and eight large demonstration projects are underway. China, often dismissed as an environmental renegade, is working on carbon capture.
 
“It is wrong to think that China doesn't care about the environment,” said Sarah Forbes of the World Resources Institute, which has an office in China and is working with the Chinese.
 
There are more questions than answers about whether carbon can be captured from utility chimneys cheaply, and whether enough of it can be kept out of the atmosphere to make the effort worthwhile. But the effort is underway.
 
Remember, it took 40 years to beat back the energy crisis. — For the Hearst-New York Times Syndicate
 
 
 
 

Power Africa: The Grass Is Singing

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It is a lasting memory of Africa: men walking dozens of miles searching for firewood. No stick is dismissed and is added to a bundle, mostly carried on the head.
 
In most of Africa, all 54 countries lying south of the Sahara Desert, food is a problem and so is something to cook it with. As populations have grown, so has destructive deforestation.
 
The problem is not confined to rural areas. It spreads out from the shanty towns that surround the cities. There is no electricity, so something must be burned. Of course, it means dismal living conditions. Life without electricity fits Hobbes' description of life after war: “solitary, poor, nasty, brutish, and short.”
 
Against this background, President Barack Obama has proposed a $7 billion electrification initiative. To use an expression adopted from T.S. Eliot but popular in Africa, the grass must be singing.
 
It is the right proposal at the right time, but it is also fraught with huge difficulties of implementation.
 
The administration is quick to admit that to bring electricity to the 70 percent of Africans who do not have it will cost $300 billion, more to maintain the deteriorating electric systems that already exist in and around the cities.
 
Barry Worthington, executive director of the United States Energy Association, part of the World Energy Council (WEC), and an expert on African energy, says the president is to be commended “at least for raising the issue of the people who have no electricity and what that does to economies as well as the lives of the people.”
 
For years, Worthington says, the WEC and organizations like the World Bank have been trying to draw attention to the pitiable electric supply situation in Africa.
 
But he also says the fix will not be quick. The 54 countries that make up Africa south of Sahara Desert are among the most difficult in which to do business.
 
To start, there is something a little dreamy about Obama's belief that the task will be undertaken by public-private partnerships. This is a concept more alluring in theory than in practice.
 
Obama will find that before they invest, corporations need to know what their chances of making money commensurate with the risks will be be. To do this they need political stability, respect for property rights, and a legal system where they can seek redress if things go wrong. These basics are in short supply in nearly all over Sub-Saharan Africa, with the possible exception of South Africa.
 
But looming above all is the destructive force of corruption. Corruption in Africa is interpreted as capitalism in practice. It has no shame; it is the way of the world.
 
In Zambia, for example, western mining companies that had operated copper mines there before and after a period of nationalization pulled out a decade ago abandoning hundreds of millions in new investment because corruption — sometimes operating as a kind of political protection money – became so severe that the mines could not operate and needed investment was wasted. The Chinese became major players.
 
Two years ago, it appeared the Chinese had found new ways of dealing with the corruption issue but that seems to be faltering. Ghana is awash with Chinese freelance gold prospectors, who were initially encouraged to come and pan for alluvial gold; now they are being driven from the mining claims by corrupt licensing officials and gangs of thugs. China is not exempt.
 
Africa is rich in energy with coal, gas, oil, rivers suitable for hydroelectrical development, sunshine and uranium. Yet global non-governmental organizations (NGOs) have a proprietorial attitude to Africa, and they subscribe to a kind of environmental imperialism in which only “renewable” technologies that get their seal of approval should be pursued.
 
Hardly had Obama finished his speech than Emira Woods of the Institute for Policy Studies was on the PBS NewsHour denouncing coal, gas and hydro as environmentally unacceptable African power systems. One assumes that leaves wind and solar; not enough heft there to lift up a continent.
 
There have been electric power successes in countries like Botswana, Cameroon and Tanzania. Worthington says: “At least the president has shone a light on the crisis. The need is great.”
 
The grass may indeed be singing, but softly. — For the Hearst-New York Times Syndicate