liquefied natural gas

The Ghost of Jimmy Carter Haunts Natural Gas Decisions

January 27, 2024 by Llewellyn King 1 Comment

The ghost of Jimmy Carter may be stalking energy policy in the White House and the Department of Energy.

In the Carter years, the struggle was for nuclear power. Today, it is for natural gas and America’s booming liquefied natural gas future.

The decisions that Carter took during his presidency are still felt. Carter believed that nuclear energy was the resource of last resort. Although he didn’t overtly oppose it, he did damn it with faint praise. Carter and the environmental movement of the time advocated for coal.

The first secretary of energy, James Schlesinger, a close friend of mine, struggled to keep nuclear alive. But he had to accept the reprocessing ban and the cancellation of the fast breeder reactor program with a demonstration reactor in Clinch River, Tennessee. Breeder reactors are a way of burning nuclear waste.

More important, Carter, a nuclear engineer, believed the reprocessing of nuclear fuel — then an established expectation — would lead to global proliferation. He thought if we put a stop to reprocessing at home, it would curtail proliferation abroad. Reprocessing saves up to 97 percent of the uranium that hasn’t been burned up the first time, but the downside is that it frees bomb-grade plutonium.

Rather than chastening the world, Carter essentially broke the world monopoly on nuclear energy enjoyed — outside of the Soviet bloc — by the United States. Going forward, we weren’t seen as a reliable supplier.

Now, the Biden administration is weighing a move that will curtail the growth in natural gas exports, costing untold wealth to America and weakening its position as a stable, global supplier of liquified natural gas. It is a commodity in great demand in Europe and Asia and pits the United States against Russia as a supplier.

What it won’t do is curtail so much as 1 cubic foot of gas consumption anywhere outside of the United States.

The argument against gas is that it is a fossil fuel and fossil fuels contribute to global warming. But gas is the most benign of the fossil fuels, and it beats burning coal or oil hands down. Also, technology is on the way to capture the carbon in natural gas at the point of use.

But some environmentalists — duplicating the folly of environmentalism in the Carter administration — are out to frustrate the production, transport and export of LNG in the belief that this will help save the environment.

The issue the White House and the Energy Department are debating is whether the department should permit a large, proposed LNG export terminal in Louisiana at Calcasieu Pass, known as CP2, and 16 other applications for LNG export terminals.

The recent history of U.S. natural gas and LNG has been an industrial and scientific success: a very American story of can-do.

At a press conference in 1977, the then-deputy secretary of energy, Jack O’Leary, declared natural gas to be a depleted resource. He told a reporter not to ask about it anymore because it wasn’t in play.

Deregulation and technology, much of it developed by the U.S. government in conjunction with visionary George Mitchell and his company, Mitchell Energy, upended that. The drilling of horizontal wells using 3D seismic data, a new drill bit, and better fracking with an improved fracking liquid changed everything. Add to that a better turbine, developed from aircraft engines, and a new age of gas abundance arrived.

Now, the United States is the largest exporter of LNG, and it has become an important tool in U.S. diplomacy. It was American LNG that was rushed to Europe to replace Russian gas after Russia’s invasion of Ukraine.

In conversations with European gas companies, I am told they look to the United States for market stability and reliability.

Globally, gas is a replacement fuel for coal, sometimes oil, and it is essential for warming homes in Europe. There is no alternative.

The idea of curbing LNG exports, advanced by the left wing of the Democratic Party and their environmental allies, won’t keep greenhouse gases from the environment. It will simply hand the market to other producers like Qatar and the United Arab Emirates.

To take up arms against yourself, Carter-like, is a flawed strategy.

Europe and Its Slippery Energy Slope

December 3, 2013 by White House Chronicle 2 Comments

BRATISLAVA, Slovakia — Europe, at present the world's largest market and largest economic bloc, is decline and living standards are in danger. That was the sober message at an energy conference here, delivered by a battery of speakers from across eastern Europe.

The narrative is that energy is what is dragging Europe down – not low birthrates and pervasive social-safety networks, but increasing dependence on expensive energy imports and hopelessly tangled markets.

Although delegates gathered to discuss the particular problems of eastern Europe, many had comments about the energy dependence across Europe; its labyrinthine regulations in nearly all 28 countries, its inability to form capital for large projects like nuclear, and governments intruding into the market.

The result is a patchwork of contradictions, counterproductive regulations, political fiats and multiple objectives that leave Europeans paying more for energy than they need to and failing to develop indigenous sources, such as their own shale gas deposits in Ukraine and Poland. It also leaves countries dependent on capricious and expensive gas from Russia, unsure of whether they can build needed electric generating plant in the future and poorly interconnected, sometimes by both gas pipelines and electric lines.

Good intentions have also had their impact. The European Commission has pushed renewable energy and subsidized these at the cost of others. The result is imperfect markets and, more important, imperfectly engineered systems.

Germany and other countries are dealing with what is called “loop flow” – when the renewables aren't performing, either because the wind has dropped or the sun has set, fossil fuels plant has to be activated. This means that renewable systems are often shadowed by old-fashioned gas and coal generation that has to be built, but which isn't counted toward the cost of the renewable generation.

With increasing use of wind, which is the most advanced renewable, the problem of loop flow is increased, pushing up the price of electricity. Germany is badly affected and the problem is getting worse because it heavily committed to wind after abandoning nuclear, following the Fukusima-Daiichi accident in Japan.

Frank Umbach, associate director of the European Center for Energy and Resource Security at King's College, London, said energy costs in Germany are now driving manufacturing out of the country and to the United States.

Umbach said that as Britain de-industrialized 15 years ago, Germany was beginning to go the same way. He said Britain had been able to sustain itself through financial services and other service sector jobs, but that was not a prospect for Germany, the industrial mainstay of the European Union. Now Britain, with its new nuclear policy, is trying to re-industrialize, he said.

Umbach urged that Europe get serious about shale gas and even burning coal. His argument was that there are environment safeguards available and that more are being developed, such as the new less environmentally assaulting techniques in hydraulic fracturing (fracking) used to extract tightly bound natural gas from shale formations.

Several speakers said the region has to face the reality that it is no longer able to generate the capital it needs for liquefied natural gas terminals, nuclear power plants and unconventional gas recovery in Ukraine, Poland and in the Black Sea offshore Romania and Bulgaria.

Many countries, particularly in eastern Europe, still balk at foreign ownership of their energy infrastructure and have actively driven away investment. Poland, for example, has frightened off shale gas developers from the United States by insisting that as the resource is developed, 50 percent of the developing company must be ceded to the state. The companies left.

In other places, the Czech Republic, for example, landowners have no claim to the resource under their land; that remains the property of the government and, therefore, they are hostile to any development on their property, whether it is for oil, gas or minerals.

The United Kingdom, by contrast, declared a spokesman for its energy ministry, Hergen Haye, is open for business. That means if the Americans, the Chinese of the Middle Easterners want to “buy into” Britain's new nuclear undertaking, “they are welcome.”

Europe's sad energy situation was summed up by Iana Dreyer of the EU Institute for Security Studies. She said Europe is still the largest trading bloc in the world, the largest economic machine and the largest market, but that it is slipping. By 2030, she calculated, Europe will have slipped to No. 3, behind the China and the United States, unless it can untangle its energy Gordian knot.

Europeans here cite the United States as the way to go in energy. It makes a body feel good. — For the Hearst-New York Times Syndicate

Bad Energy Vibes from Obama, Odd Ones from McCain

June 22, 2008 by White House Chronicle Leave a Comment

Memo To Sen. Barack Obama: Beware of your friends and their opinions.

For example, Rep. Edward Markey was on a Sunday talk show allegedly defending your position on offshore drilling. But, in fact, the Massachusetts Democrat was defending his own long-held and irrelevant views. You just had an epiphany on campaign finance. Now, you need to have one on energy. At this point, the world needs oil and will need it for many decades. True, the United States will not get any new oil from the outer continental shelf for 10 years, and it will only account for about 4 percent of our needs as long as it lasts. But even that is essential.

Memo To The Friends Of Sen. John McCain: Just when you thought your candidate had settled down to be George W. Bush Lite, he up and proved that old mavericks cannot change their ways. McCain split the difference on oil by reversing himself on outer continental shelf drilling and remaining adamant on not drilling in the Arctic National Wildlife Refuge (ANWR). This put Tom Ridge, the former homeland security chief, on the spot on a Sunday talk show. Ridge simply could not explain the inconsistency of McCain, whose presidential bid he supports.

No matter what you believe should be done, the irrefutable fact is that the world is in a terrible energy bind–and all the indications are that the world energy situation may get worse.

Politicians of the left want to believe that there are technologies ready to come on line, and they are being squeezed out by old-line energy companies. They place their faith in what are referred loosely as “alternatives,” which include solar, wind and geothermal power. These they see as being the equivalent of low-impact aerobics. Painless and environmentally neutral. These politicians oppose the burning of coal and have no coherent policy on oil and gas. They choose to believe that the current high price of oil is a combination of oil company greed, Wall Street speculation, and the Bush administration’s appeasement of the Saudi royal family.

Conservative politicians have as much problem facing reality as their liberal colleagues. They have an inordinate faith that current off-limits drilling areas, both in the ocean and on land, will produce untold quantities of energy for the United States. They have considerable faith in new technologies that will clean up coal, find oil at ever-greater depths, and exploit gas hydrates on the ocean floor. They also believe that oil shale in the West, abandoned in the 1970s because of the environmental consequences of mining and the shortage of water, will replace Saudi Arabia.

One thing the left and the right do agree on is that plug-in hybrid vehicles are going to help a lot. The theory is that they will make a big dent in the 20 million barrels of oil that the United States gulps down every day; that is 10,000 gallons of gasoline every second, according to John Hofmeister, president of Shell Oil Company.

There is an energy establishment, and it is of one mind on energy challenges. This is the thrust of its thinking:

l Energy conservation is essential

l The outer continental shelf should be explored aggressively, along with federal lands

l ANWR should be drilled immediately, and a natural gas pipeline from Alaska should have priority

l Nuclear power is the best substitute for the coal now being burned and to replace geriatric plant

l Coal gasification is the best way to burn coal

l Wind power works and should be encouraged; in particular, storing wind energy as compressed air needs research

l Liquefied natural gas imports need to be boosted

l The search for new technologies needs to be relentless

l Energy producers, from oil companies to wind farms to electric utilities, need consistency in public policy

The unsaid addendum to the establishment thinking is that Obama needs to get some energy advisers who have a solid purchase on the Earth, and that McCain needs to listen to his advisers. In 1974, governments fell like ninepins as the global economy was battered by high energy prices. The battering next time may be much worse.