Friday, September 30, 2011

US Oil Imports Falling Rapidly & Can Easily End By 2025

US will be less dependent on foreign oil in 2011 than in any year since 1999. A major reversal in oil imports is now underway, and the USA can indeed eliminate oil imports by 2025.

Here is what is happening and why.  Oil imports surged from 1985 to 2005, when they peaked and accounted for 60% of all the oil we consumed.  In 2010 oil imports provided 47% of the oil consumed here.

The good news keeps rolling in 2011, when the US may import less oil than anytime since 1999. 

Why is the USA reducing rapidly oil imports.  Three forces are at work right now.

First, domestic oil production is increasing after declining for 35 years and reaching its nadir in 2008.  US oil production is on track to increase again in 2011.  The breaking of the perpetual decline in USA oil production is a remarkable and remarkably important event.  The cause of the production increase is mainly new, unconventional oil production gaining momentum.

Second, USA biofuel production is surging.  Biodiesel production trippled in 2010 and ethanol production is reaching 900 million barrels/day, a considerable number, and up from 700,000 barrels per day in 2007.

Third, efficiency of oil use is increasing as miles per gallon rises.  The 2 major increases in CAFE standards since 2009 will have a significant impact when they are fully in place on total oil consumption.

What is not yet having much impact on oil imports is substituting natural gas and electricity for oil.  More natural gas and electricity is being used to power vehicles but the totals are minor currently.

Using more gas and electricity to power vehicles, when combined with domestic oil production increases, biofuel increases, and improved efficiency, can end USA dependence on foreign oil.

The USA should adopt a policy that drives down US oil imports by 3 percentage points every year for the next 15 years.  We now have powerful tools to end oil imports by 2025.

US Energy Production Is Booming & New Records Are Being Set

The US economy has been slammed since 2007 and is teetering at the edge of a deep abyss right now, but US production of energy is booming. See www.eia..gov/totalenergy/data/monthly/pdf/sec1_3.pdf.  In 2010, the US fossil, nuclear, and renewable industries produced a total of 75.056 quadrillion Btu, beating the previous record year of 2008 and dwarfing the 1973 level of 58.241 quadrillion Btu.

The first 6 months of 2011 have the US on track to set the total energy production record again at about 76.5 quadrillion Btu.  Domestic natural gas production is on pace in 2011 to  reach 23 quadrillion BTU and break the all-time record set way back in 1973.  And the USA is the world's biggest natural gas producer already.

But it is not just gas. Consider domestic oil production that has been declining precipitously just about  every year since 1973 when it stood at 19.493 quadrillion Btu and reaching a low of 10.509 quadrillion Btu. 

A 35 year long decline in domestic oil production reversed in 2009 when production increased. Production increased again in 2010 and probably will again in 2011.  The domestic oil industry has turned the clock back to 2004 production levels and that is a good thing.

If Lisa Jackson and the EPA is trying to hurt US oil and gas production, they are doing a bad job of it.  Just perhaps the EPA is not out to hurt oil and gas production.  That is a shocking thought to some.

Renewable energy is also a part of the boom.  Renewable energy production that stood at 4.411 quadrillion Btu in 1973 and 6.537 quadrillion Btu in 2007 will likely reach 9 quadrillion Btu in 2011 and surpass the total energy from the US nuclear industry.

Coal is the only domestic industry that is not recording increasing or even record production.  Coal set its record year in 1998 with 24.045 quadrillion Btu.  In 2010, coal production was 22.077 quadrillion Btu, its lowest level since 2002.

US nuclear production set its record in 2007 at 8.445 quadrillion Btu and was essentially flat at 8.441 quadrillion Btu in 2010.  Some recent operational issues at a few nuclear plants may mean a small decrease in 2011 nuclear energy production.

Gas, renewables, and oil are leading an energy boom in the USA. That is a major bright spot in our economy with big implications for the future.

Drilling In State Parks Would Be A Disaster For Everyone

More than 7900 Marcellus drilling permits have been issued. Private land owners have leased huge quantities of their land and eagerly wait in most cases for drilling and royalty checks to start. 

More than 700,000 acres of 2.2 million acres of the state forest has been leased over decades for gas drilling.  The Pennsylvania Game Commission has leased state game lands. The Fish and Boat Commission is considering doing so.

But a redline for an overwhelming majority of Pennsylvanians is the state park system.  Drilling there will destroy the essence of a state park and, make no mistake about it, drilling there will trigger a public relations and political disaster for the companies involved and the gas industry itself.

The blowout and blowback would be huge.  Polling shows in fact that 77% oppose further drilling in the state forests where drilling has taken place for more than 50 years.  Probably 85% of the public will oppose drilling in state parks.

PennFuture has launched a campaign to stop drilling in Pennsylvania state parks. For details go to http://www.pennfuture.org/ on the home page and see www.post-gazette.com/pg/11272/1178431-503.stm?cmpid=marcellusshale.xml#ixzz1ZLw4pmcK

The campaign features a pledge placed before the gas industry to not drill in state parks or take gas from state parks and legislative changes that would include a major impact fee for drilling in state parks that presumably would lessen the profit from doing so.

Gas companies should stay on land where they are wanted.  Private landowners want in many cases drilling.  The people of Pennsylvania own the state parks, and they don't want state parks drilled.  Drilling in state parks would be a disaster for everyone.

Thursday, September 29, 2011

PA Is More Than Gas, Pt 2: 8 New PA Wind Farms Possible By 2012

Previously this blog listed the three new wind farms that will begin operating this year.  But wind farm development is exploding for 2012. 

As many as 8 new wind farms could become operational in Pennsylvania by the end of 2012.  If the 8 that are in various stages of construction and development were all completed, they would add another 650 megawatts of wind power to Pennsylvania's existing 751 megawatts, bringing Pennsylvania's total wind power to 1401 megawatts.  That would be enough wind power to supply about 420,000 homes.

Here is the listing of the 8 wind farms that are in the pipeline, the companies that are developing them, and their possible date to commence operations:

1. The 46 megawatt South Chestnut Wind Farm (Iberdrola): Construction finishing and operational this October.

2. The 75 megawatt Highland North Wind Farm (Everpower): Construction underway and operational this November.

3. The 38 megawatt Chestnut Flats Wind Farm (Gamesa): Construction underway and operational at end of 2011 or early 2012.

4. The 50 megawatt Sandy Ridge Wind Farm (Gamesa): Construction underway and operational at end of 2011 or early 2012.

5. The 150 megawatt Twin Ridges Wind Farm (Everpower): Construction and operational in 2012

6. The 82.5 megawatt Fox Hill Wind Farm (AES): Construction expected to begin 4th quarter 2011 and operational in 2012.

7.  The 69 megawatt Laurel Hill Wind Farm(Duke Energy): Operational by September 2012.

8. The 140 megawatt Mehoopany Wind Farm (BP): Operational in 2012.

Will all these wind farms become operational by next year?  The odds are quite high that they will, and it is almost certain that at least 6 of the 8 will be operating by December 31, 2012

The South Has Highest Unemployment Rates & Economic Model Implodes

The sunbelt is now a miserable place if you are looking for a job.  Six of the 10 states with the highest unemployment are in the South.

The Southern model of economic development features low or no taxes, low or no regulation, low spending on public services and education, right to work, cheap labor. It has imploded and is now attracting national attention from economists and media.  On tuesday, September 27th, the NYT ran a big story about this trend more than 2 months after this blog noted what had happened in Dixie.  See http://www.cnbc.com/id/44685033

In this global economy, it is basically impossible to out-compete the world by a strategy of having the lowest labor costs, the lowest taxes, the lowest regulation, since some countries are prepared to push costs to zero or poverty levels.  Living in poverty is not the American dream.

Leading the Southern misery index is South Carolina with a 11.1% unemployment rate; Florida comes next at 10.7%; then North Carolina at 10.4%; Mississippi at 10.3%; Georgia at 10.2%; and Alabama at 9.9%.  Tennessee at 9.8% and Kentucky at 9.5% both have unemployment rates above the national average.

Despite the implosion of the Southern model of economic development, people in and out of Pennsylvania's state government still point to the South as a role model.  Though Pennsylvania was a national leader in creating jobs from January 2010 to April 2011, Pennsylvania is now mimicking the policies of Dixie.  The result has been that Pennsylvania's unemployment rate has risen from 7.4% in May to 8.2% in August.

The South's economic numbers and our rising unemployment pose a challenge to the ideologues who often sing Dixie for economic policy.  The lesson will be resisted but is clear. 

Pennsylvania should look away from the land of cotton when seeking ideas that work in today's global economy.

Wednesday, September 28, 2011

NY Fracking Poll: Something For Everyone

Governor Cuomo somehow has maintained his popularity in NY, while shale gas drilling keeps its small plurality support  of 44-40.

Those are the two big conclusions from Siena University's new poll that surveys opinion about New York's political leaders and fracking. www.siena.edu/sri

Another interesting tidbit includes the finding that by a 51 to 33 margin the public trusts more the opponents of drilling than the supporters.

While it can seem that nobody talks much about anything other than Marcellus, the poll actually finds that in NY a full 24% are paying no attention to the discussion about opening shale drilling and another 23% are paying little attention.

18% of the NY public is paying a great deal of attention to the topic and 33% are paying some attention.  The portion of the public that is intensely focused on the issue is small:  a reminder to shale battlers of all stripes that for most people the shale battles are not front and center.

 

Gas Drilling & Communities: A Tale of Two Pennsylvania Cities

One is booming, with an economic growth rate of 7.8%, making it the 7th fastest economically growing area in the USA.  A 7.8% economic growth rate is strong, even Chinese-like. 

The other now has the highest poverty rate at 41.3% in America for communities with more than 65,000 people. It has eclipsed Flint, Michigan.

The booming town is Williamsport, and the poorest in the nation is Reading.

Williamsport in Lycoming County is best known for hosting the wonderful Little League World Series each year in early August.  Williamsport is also in the heart of the gas drilling boom triggered by the Marcellus Shale development. 

Reading is a proud town, the home of the minor league Reading Phillies, with a great manufacturing history and tradition.  It has no gas drilling and is not above the Marcellus Shale.   Yesterday it was featured in the New York Times, with a picture of people in a line waiting at a food pantry.

While Gas drilling by itself  is not going to make Pennsylvania's economy successful, since Pennsylvania's economy is one of the biggest in the nation and world, highly diversified, with no one industry dominating it.   Pennsylvania is not North Dakota, Alaska, or Wyoming, with a few hundred thousand jobs in total, where energy production alone can make the entire state boom or bust.  Instead the Commonwealth is an economic powerhouse with more than 6 million jobs and 12 million people.

Gas drilling also creates a set of impacts and costs that must be minimized by strong regulation and reasonable taxation.  But just as true and as important, gas drilling is creating important opportunities for communities, especially in the 6 counties where Marcellus wells are concentrated, and should for the entire state of Pennsylvania if sound policies are followed.

Or to put it another way, would you prefer to be the Mayor of Williamsport or Reading managing the problems and opportunities that both have?  Would you prefer to be looking for a job in Williamsport or Reading to support your family?

2011 Sets Record For Disasters & Disaster Trend Is Up

Even before September has ended, 2011 sets the record for the most federally declared disasters ever in any one year.  2011 is already at 84 and will likely add to its notorious place in the record books kept by FEMA.  See www.fema.gov/news/disaster_totals_annual.fema

What year previously had the most disasters?  2010 when 81 federally declared emergencies took place.  Back-to-back years for disasters. 2010 and 2011 are also two of the warmest years ever globally and in the USA. Two years does not make a real trend. 

But Joe Romm at Climate Progress has a provocative graph of the number of natural disaster going back decades.   He also links to science papers drawing a link between rising temperatures and natural disasters.  See http://thinkprogress.org/romm/2011/09/26/328856/2011-sets-record-for-most-disasters/

Tuesday, September 27, 2011

Methane Leakage Issue Flaring Today

The methane leakage issue is flaring today.

The Environmental Protection Agency in Pittsburgh is holding a field hearing on proposed rules regulating methane and other air emissions.  80 people are signed up to testify.

 Also on the front page of today's NYT is a story by Clifford Krauss (not to be confused with the infamous "NYT Gas Reporter") focusing on the flaring of natural gas in North Dakota.  See http://www.nytimes.com/2011/09/27/business/energy-environment/in-north-dakota-wasted-natural-gas-flickers-against-the-sky.html?_r=2&pagewanted=all.

According to the NYT story, approximately 160 million cubic feet per day of natural gas are flared in North Dakota, up from less than 25 million cubic feet per day in 2005.  That is a lot of gas, roughly 0.25% of all gas consumed in the USA on an average day.

At $4 per thousand cubic feet, the industry is burning $640,000 worth of gas per day or about $19 million per month.  The real value of the gas is higher than those numbers, because it also contains propane and butane that have real value too.

Why is industry flaring so much gas and burning dollars?  The gas is a co-product of the more valuable oil that is being drilled in North Dakota, and the construction of the gathering lines and pipeline infrastructure to move the gas to market is not keeping pace with the drilling.  It is profit-maximizing to produce the oil and burn the gas, while the pipeline infrastructure catches up.

The flared methane is less damaging to the environment by a factor of 22 than venting methane without flaring it would be.  Professor Howarth in his now infamous life-cycle study assumed all methane was vented and none was flared. That assumption was just one of many that he used to produce his now debunked results.

But venting or flaring is wasting, and flaring does release heat trapping gas to the atmosphere.

Again according to the NYT story, the flared methane is the equivalent of 2 million tons of carbon dioxide in the air every year.  USA told carbon emissions are about 7 billion.

In a sane world, with people reasoning together, surely it would be possible to structure business operations and regulatory rules that captured gas and put in pipelines in a timely manner to reduce flaring to minimal levels and to avoid normally venting. 

Hopefully, the EPA's proposed July 28th rulemaking can make progress in this area.  Moreover companies wishing to establish good environmental performance records must focus on methane leakage issues now, if they have not already.

Marcellus Wells Per Pad Rising: Good Trend

A major concern for many Pennsylvanians about gas drilling is land disturbance and forest fragmentation resulting from well-pad construction.  The disturbance includes the well pad area of course and can include roads needed to reach a pad in a forested area. 

Spacing out well pads and concentrating as many wells as possible at a single well pad are practices that can decrease land disturbance impacts.  They also are practices that can decrease the cost of drilling.

According to data developed by MarcellusGas.Org, the number of wells per pad has been rising each year since 2008.

Here are the numbers:

2008 - 1.2 wells per pad
2009 - 1.7 wells per pad
2010 - 2.5 wells per pad
2011 - 2.9 wells per pad

More wells per well pad reduces land impacts, makes inspections more efficient to do, and lowers industry development costs.  It is a good trend.

MarcellusGas.Org also crunched numbers that show how many well pads have various numbers of permitted wells.

1,552 well-pads have 1 permitted well
446 well-pads have 2 permitted wells
296 well-pads have 3 permitted wells
217 well-pads have 4 permitted wells
172 well-pads have 5 permitted wells
221 well-pads have 6 permitted wells
69 well-pads have 7 permitted wells
51 well-pads have 8 permitted wells

MarcellusGas.Org states that there are 50 well pads with 9 or more permitted wells.  A DCNR well-pad has the most permitted wells--21.

Stunning Texas Gas & Electricity Summer Facts: Making Solar A Bargain

Record high temperatures in Texas this summer produced incredible demand and prices in energy markets there.  Just consider these electricity and gas facts.

Electricity prices regularly during afternoon hours were above 100 cents per kilowatt-hour and reached 300 cents per kilowatt-hour, making payback periods for solar systems much shorter than if prices were in the 10 to 15 cents range.  An air conditioned home easily consumes 50, 100, or more kilowatt-hours on a 100 plus degree day.  Paying $1 or $3 per kilowatt-hour produces astronomical power bills and makes solar systems a bargain by comparison.

And what produced most of Texas' electricity?  Gas-fired power plants.

Gas demand at just Texas power plants in two sweltering days in August hit 7 billion cubic feet per day, a number that is greater than 10% of total national gas demand on an average day, according to Gas Business Briefing.  Once the 115 degree heat ended, power plant gas demand declined to 4.6 billion cubic feet per day in mid-september and then to 3.7 billion cubic feet per day on September 21st.

Governor Perry actually accepts that the average temperatures in Texas are up 2 degrees since 1970 but descends into climate conspirarcy theories to push away the cause being rising concentrations of heat trapping gas. But the reality of rising temperatures are changing the energy demands and prices of Texas. They also are good for the gas and solar businesses there.

Monday, September 26, 2011

"Spin Dizzies Debate Over Marcellus Shale Drilling"

This blog has been trying to cut through to the real issues in developing the Marcellus Shale and that has been no easy task given the passions stirred.  Today the Patriot-News ran on its front page an AP story entitled, "Spin dizzies debate over Marcellus Shale drilling."  It is a must read.

Go To: http://www.pennlive.com/midstate/index.ssf/2011/09/post_251.html.

Global Depression Fear Yields Sub $3 Gasoline

Last week was a replay of weeks following the September 15th, 2008 Lehmann Brothers bankruptcy and the global credit crisis that triggered mass lay-offs and plummeting oil prices in America, Europe, and Asia. Deflation is stalking this land and the world.

In its worst week since October 2008,  the Dow lost 6.4% and gold even fell 10% or $101.90, another indicator that the global economic risk is deflation and not inflation. 

Oil fell 9%, reaching $79.85 at the West Texas Benchmark, and falling from $113 in April.   Remember in 2008 oil plummeted from $147 per barrel in July 2008 to $33 in December when the oil markets signaled a depression was around the corner.

Representative Bachmann promised if elected President she would restore $2 per gallon gasoline, noting that in January 2009 gasoline cost less than $2, and blaming President Obama for $4 gasoline.  A good dose of global depression fears already has pushed gasoline below $3 in some parts of America, according to Jonathan Fahey of the AP, so Bachmann may keep her promise whether she wins the Presidency or not.

The AP further reported that the national average for gasoline was now $3.51, down from $3.98 in May.

What is triggering the massive decline in oil prices?  Is it surging demand?  No, it is falling demand, with real fear that Austerity Economics now being practiced in Europe and at the state and federal levels in America will throw the world into depression and deflation.

Falling into depression, of course, is the only way to create in the modern world sub $2 gasoline.  And that is one more powerful reason why the USA must end importing oil.

PA Is More Than Gas: 3 More New Wind Farms This Year

Pennsylvania is not Marcellus gas and nothing but Marcellus gas. For example, 3 more wind farms will begin operating by the end of 2011. 

They are the 46 megawatt South Chestnut wind farm owned by Ibedrola that will begin operations in 2 weeks; the 50 megawatt Sandy Ridge wind farm owned by Gamesa; and the 75 megawatt Highland North wind farm owned by Everpower that will begin operations in November.

Together the three will add another 171 megawatts of wind power or enough for about another 50,000 homes.  They will boost the Pennsylvania total wind capacity to 922 megawatts from 751 megawatts.

922 megawatts of wind avoids large amounts of pollution that would otherwise be pumped into our air and water.  It also is significant electricity supply that lowers wholesale electricity prices and benefits consumers.

Wind is growing here and is already an important part of the Commonwealth's energy mix, providing jobs, tax payments, and income to landowners.   Still more wind farms  will begin operations in 2012 when Pennsylvania will join the 1,000 megawatt wind power club.

Friday, September 23, 2011

US Becoming Oil Independent As Peak Oil Moves Decades Away

Massive new finds of oil in the Western Hemisphere and Africa, unconventional oil reserves in Canada and Venezueala, and new technology's ability to get more oil out of old, depleted fields are just some of the reasons why Peak Oil is now thought to be decades away rather than years. 

Daniel Yergin, the author of both The Prize and The Quest, states that 1 trillion barrels of oil have been produced by the oil industry since its birth, that 5 trillion barrels are in the ground, of which 1.4 trillion are recoverable technically and economically at today's prices and with today's technology.  He for one predicts an oil "plateau" around mid-century.

Even in the USA oil production since 2008 has been increasing and now is up 10%. This is a major reversal.

Joined with large increases in biofuels and lower oil consumption driven by rising efficiency, the growing US production has driven down net oil imports from 60% of total oil consumed here to 47%, according to the Energy Information Administration. This is big, good and so little discussed news.

 We have begun the journey to oil independence and need to finish the trip rapidly.

Just look at the Bakken field in North Dakota for a demonstration of why US oil production is up.

In 2003 Bakken ,000 barrels per day but is now at 400,000 barrels per day.  The USA consumes about 19 million barrels per day so Bakken provides 2% of USA consumption. 

Another way to measure Bakken alone is to compare it to our oil imports.  Net oil imports are a bit more than 9 million barrels per day so that Bakken is equal to about 4% of our imports.

Bakken is not alone by any means in the tight oil field category, and tight oil field production in the USA may reach 2 million barrels per day.  Exploration is underway in Ohio as one example of likely new oil production.

Global production capacity is now 92 million barrels per day in 2010 and growing.  Fierce debates erupt over how much capacity can or will grow.  Yergin believes production grows to over 110 million per day by 2030.

Does the rising world production of oil mean low prices ahead or that the world has inexhaustible supplies?  No to both. 

Most of the new oil that is being found or produced from unconventional sources is much more expensive than the Saudi oil fields.  Generally an oil price of about $80 per barrel is needed to recover costs at the most expensive, deep water finds.

And while world oil production is growing, world oil demand is growing more rapidly. John Hoffmeister, the retired head of Shell North America, believes world oil demand could jump 10 million barrels per day by 2015.

China consumes 9 million barrels of oil per day and may reach 15 million by 2015.  India is at 6 million and could be at 9 million by 2015.  The rest of the world may add another 1 million barrels per day by 2015.  All oil demand growth will likely be outside Europe and North America.

Absent a global recession or depression, world oil markets are going to be tight over the next 5 years, with prices higher than lower.  In the modern world, the way to low prices, like the $30 per barrel in December 2008, is ruin or depression.

High oil prices are economically damaging but low prices signal economic collapse because petroleum remains the dominant global energy fuel.  Every day America delays moving to natural gas, electrricity, efficiency, and domestic production to replace foreign oil puts America's economy and environment at more risk.

Walmart Puts Solar on 130 Stores

Everyday low prices and solar go together at 130 Walmart stores in California. That is 75% of Walmart's stores in California.

Walmart says the solar systems will save $1 million. Walmart neither installs, owns, nor operates the systems. Solar City does all that.

Solar City employs 500 people and says it will hire hundreds more by the end of the year.

Walmart is America's largest retailer, the largest employer in Pennyslvania.  When it is moving aggressively into solar, its action speaks louder about the health of the solar industry than a lot of words from solar advocates and its critics.

Thursday, September 22, 2011

EIA Forecasts Small Increase In US Gas Demand: Missed Opportunity?

If the EIA's base case in its most recent projection of international energy demand and supply through 2035 is correct, then the USA is going to be burning for the next 25 years much more oil and coal than it should.  To put it another way, the gas bridge to the future would be very long and narrow.

EIA projects that the US gas demand increases just 0.5% per year or 14.2% from 2008 to 2035. It has gas demand increasing from 23.2 trillion cubic feet per year to 26.5 trillion cubic feet.  By contrast, global demand for gas increases the fastest of any fossil fuel at 1.6% per year.

If EIA is right that US gas demand increases by just 0.5% per year, the oceans of gas in the USA will only be modestly tapped by the time 2035 arrives.  There will be miles and miles left to go on the bridge to the future. 

The EIA projection coming true would also mean that the USA had not moved much transportation demand at all from foreign oil to domestic gas and that relatively little gas replaced coal-fired power plants.

The EIA long gas bridge to the future scenario would also mean more emissions for the next 25 years, more US economic risk to high world oil prices, and more national security risk than if the use of gas grows at rates much higher than 0.5%.

The EIA base case assumes no changes in policy.  This result is what happens if the current rules and distortions of the market are not modified.

India's Energy Growth Affects You: Key Facts

It is a given that world energy demand will increase over the next 25 years.  Absent a planetary disaster, there is zero chance that it will not.  But how much? 

The Energy Information Administration issued its annual international energy outlook this week, and its base case projects global energy demand increasing 53% by 2035.  My hunch is that the surprise will be that demand, while it increases, will grow quite a bit less than the EIA base case estimate.

Yet, the energy facts of India alone do make me gulp.  40% of Indians are not connected to the electric grid.  Wood is the primary fuel for 75% of rural Indians.  And remarkably the per capita electricity consumption of India is just 700 kilowatt-hours, when the US per capita consumption is 14,000 kilowatt-hours, according to an E & E article published yesterday.

All that is going to change fast.

India has 1.2 billion people or more than one in six people on earth.  The odds are highest that the person who pushes the world population to 7 billion will be born in India this October.  And India's economy has been growing about 8% per year, growing the Indian middle class and urban population.

Ron Somers, the President of the U.S.-India Business Council, is quoted in the E & E article as saying that India will need 350,000 megawatts of new power over the next 5 to 10 years to maintain 8% GDP growth. Gulp.

To put that in context, the USA has a bit more than 1,000,000 megawatts of generation.

Wednesday, September 21, 2011

Surprise: Pittsburgh Not Among 20 Dirtiest Air Areas

When rankings of air quality are published, Pittsburghers expect that their town will get another round of bad publicity, fighting it out with some place in California typically for the very worst air in the USA.  With that painful, recent history in mind, the new study from Environment America ranking Pittsburgh as the 29th in the list of smoggy air is progress, though not exactly great news.  See the Danger in The Air Report at http://www.environmentamerica.org/.

The study uses for its rankings EPA Air Quality Index data for 2010, counting the number of days that an area had air bad enough to trigger a Code Orange, Code Red, or Code Purple Air Alerts warning the air is unhealthy to breathe.

While being 29th is much better than being number 1 in this ranking, it does not mean that Pittsburgh's air is healthy to breathe everyday.  Not by a long shot.  Pittsburgh in 2010 had 13 Code Orange days and 1 Code Red day.  On a Code Orange day, children, the elderly, those with respiratory conditions are advised to minimize going outdoors and to avoid exercise or exertion.  On a Code Red day, everyone is warned to avoid breathing outdoor air. 

These health warnings are vital to follow as smoggy air sickens and kills people.

And what is a Code Purple day? Horrible. Deadly.

What about the rest of Pennsylvania?  How did it rank? 

The worst air in Pennsylvania is in the Philadelphia area which ranked 8th among all areas.  Philadelphia had 29 days when a Code Orange or higher alert was issued, including 3 Code Red days in 2010.

Reading, Lancaster, Harrisburg, York are just some of the other Pennsylvania areas where smoggy days threaten health.

There were 35 days when somewhere in Pennsylvania a health alert for dangerous air was issued during 2010.

As Environment America points out, the standard used to determine whether the air is so dirty as to require a Code Orange or higher alert was set in 2008 when the Bush Administration lowered the previous standard from 80ppm to 75ppm.  By doing so, the EPA Administrator at the time refused to follow the EPA Science Advisory Board that recommended a level between 60ppm to 70ppm was needed to protect human health.

That controversy still is boiling with court cases filed suing EPA for not setting the standard within the recommended range and then President Obama's recent directive to the EPA that was in the process of lowering the standard to the recommended range to wait until 2013, the next time a 5-year review of the standard is due, to make any changes to it.

Bottom line the current health alerts use the Bush Administration 75ppm standard to warn the public. 

Another bottom line is that the air is getting cleaner, with large drops in nitrogen oxide and sulfur dioxide pollution in 2010 compared to 2008 (See recent posting for the extraordinary numbers). But more clean up is needed to make sure the air is healthy to breathe every day.

Extraordinary Shale Production Growth Rates Smackdown Ponzi Charge

At some point shale gas production numbers--drilled, produced, consumed--end the Ponzi scheme story advanced by the NYT and a few others. Consider extraordinary production shale data from the Energy Information Administration that suggest that point has arrived.

Shale gas production increased by on average 17% per year from 2000 to 2006. Those strong gains meant shale production doubled every 4 years. But the 2000 to 2006 production gains were just a preview of production growth ahead.

From 2007 to 2010 shale gas production increased by 48% per year or it doubled about every 18 months.

Shale gas today accounts for 30% of all gas consumed. That's quite a reality for a fraud or Ponzi scheme.

The USA has now had 10 years of shale gas production that have featured explosive annual growth rates and added up to massive total annual production. These production numbers alone should drive a stake through the Ponzi diversionary charge.

Big News: First Solar Makes Big Efficiency Breakthrough

The Holy Grail in solar panel manufacturing is to make a low-cost, high efficiency panel.  Already a low-cost producer, America's First Solar has made a solar efficiency breakthrough for its thin film solar cell that jumps its efficiency of converting sunlight to power from 11.7% to 17.3%.  This is an enormous jump in an industry where cell efficiency improves typically about 0.5% per year.

The making of solar panels is intensely competitive business that is going through a shakedown with General Electric entering the business this year and small companies like Solyndra and Evergreen bankrupting.  First Solar is America's largest solar panel manufacturer and one of the world's top ten.  It is also one of the most innovative PV panel makers that has pushed its cost down to 73 cents per watt.

A 73 cents per watt, 17.3% efficiency solar panel competes well with Chinese manufacturers and most importantly produces electricity at a price equivalent to fossil fuels without tax credits.  First Solar states that it has about a "dozen changes" that it will be making in its production processes to bring this breakthrough to the market.

Unlike most PV panel makers, First Solar makes a thin film and not crystalline silicon solar panel. Thin film solar cell panels use less materials and are cheaper but have been at least 50% less efficient at converting sunlight to power than crystalline silicon cell panels.  See http://www.solarbuzz.com/ for more discussion about the differences. 

First Solar's efficiency breakthrough for thin film means that it has closed the efficiency gap with the most efficient crystalline silicon panels on the market to about 10%, while retaining the cost advantages of thin film.

Tuesday, September 20, 2011

US Solar Jobs Top 100,000

High profile bankruptcies at Solyndra and Evergreen, both panel manufacturers, create the false impression of an imploding solar industry in the US.  Solar jobs in the US actually grew 6.8% from August 2010 to August 2011 when compared to prior period and now total 100,237. 

The foregoing numbers come from the Solar Foundation that  conducts an annual job census and is releasing tomorrow its full report.  See http://www.solarfoundation.org/.

For the same period, jobs in the USA grew 0.7% so the solar industry remains a bright spot in a struggling economy.

Solar jobs are  growing and solar installations are booming.  Solar installations during 2011 in the USA will smash the 2010 record that in turn smashed the 2009 record that smashed the record in 2008 and so on.  Close to 2,000 megawatts of solar power will be installed in America this year.

Globally 2011 will be another big year for solar installations and possibly a record year.  Total global installations are expected to be between 15,000 and 20,000 megawatts in 2011.

PA Ranks Second In Producing Gas Wells

Only Texas with 93,000 gas wells in 2009 had more gas wells than Pennsylvania, according to the Energy Information Administration. Pennsylvania ranked second with more than 57,000 producing gas wells in 2009. More than 95% or more than 55,000 of the PA gas wells were traditional, shallow wells and not Marcellus shale wells.

The number of producing gas wells in Pennsylvania has nearly doubled since the 1990s when gas prices were often at $2 for a thousand cubic feet or lower.  Importantly, in terms of the number of producing gas wells, as distinguished from the volume of gas produced, traditional, shallow gas wells account for 90% of the increase in gas wells.

No matter how the Pennsylvania Department of Environmental Protection organizes its oil and gas staff it has a big job.  Staffing levels and resources to do that job are more central to mission than organizational charts.

Despite the high number of producing wells that accounted for about 12% of all gas wells in the USA during 2009, Pennsylvania produced just a bit more than 1% of US gas in 2009.

As the big Marcellus wells start producing, Pennsylvania gas production is surging and now accounts for about 6% of US production.

Finally, which state ranked third in the number of gas wells? West Virginia. It too is home to both numerous traditional wells and a increasing number of  Marcellus wells.

Americans Staying Cool In Record Numbers: AC Jumps

A lot more Americans are staying cool during hot summer days than just 16 years ago. In 1993 68% of USA households had air conditioning. By 2009, 100 million homes or 87% did, according to the Energy Information Administration.

With air conditioning growth has often come a bigger home too.  A bigger, air conditioned home over the last 50 years has been part of what rising incomes bought. 

The last 10 years, however, have not seen rising real incomes for many Americans so the trend to bigger, air conditioned houses has likely run its course.  In fact the real median national income has fallen since the credit crisis and near total economic collapse triggered by the Lehmann bankruptcy on September 15, 2008.

The increase in air conditioning usage from 1993 to 2009 is one reason why the nation's electricity usage during that period normally increased close to 2% every year.  Rising temperatures, population growth, growing GDP, more work being done with electricity are still other explanations.

Air conditioning efficiency standards were also raised during this time and that moderated air conditioning demand and electricity bills. 

Monday, September 19, 2011

DEP Oil & Gas Reorganization: First Thoughts

Will the DEP plans for a new, stand-alone Oil and Gas Bureau be positive or negative for those regulated and for the people of the state? (See Don Hopey's article about the reorganization at http://www.post-gazette.com/pg/11262/1175941-100.stm?cmpid=latest.xml&utm_source=twitterfeed&utm_medium=twitter.

Moving the Oil and Gas Bureau to a stand-alone bureau that reports to Harrisburg and not to the directors of the 6 regional offices is not on its face unreasonable, but it will not heavily determine whether regulation works well. The move itself will likely have some beneficial and negative affects, but at the margins.  One metric to watch carefully is whether the new Oil and Gas Bureau can respond to local and regional concerns, since gas drilling and production now is found in so many parts of Pennsylvania and is not as geographically concentrated as mining.  The mining program at DEP is pointed to as the model for the new Oil and Gas Bureau.

Four points determine whether regulation works well:

1.  Are regulators professional and independent of everyone with whom they must deal who care passionately about hot regulatory cases and issues?  They should not be the friend or foe of anyone.

2. Are the rules that they must enforce strong enough to protect the environment and effective?

3. Does the regulatory agency have enough staffing and other resources to process permits, enforce rules, and provide information to the public?

4. Is the regulatory agency instructed by its regulatory leaders to enforce the rules, to be the environmental cop on the beat?

The answers to these 4 questions, much more than organizational charts, will determine whether regulation works well for all.

Don Hopey is also reporting that further layoffs at DEP are anticipated, though apparently not in the Oil and Gas program.  Staffing at DEP is already cut through the bone after now more than 3 years of declining state appropriations and this year's decision in another bow to Grover Norquist's Pledge to halt all new fee packages to finance the agency.  More reductions will inevitably degrade the agency's ability to achieve its mission.

3% Of Americans Are Millionaires

Last week's census data documented that poverty is growing and the national median income is declining. 22% of US children live in poverty, while social security keeps the poverty rate for senior citizens to 9%.

While poverty grows, America is home now to 10 million millionaires or 3% of the 309 million population. These are individuals with net worth of 1 million dollars or more.

The millionaire population is projected to grow rapidly over the next 10 years. CNBC reports today that Deloitte Financial Services believes that America will be home to 20 million millionaires by 2020. If so, given projected population growth, more than 5% of Americans will be across the million dollar threshold.

CNBC also reports that 20% believe that they could become millionaires. The health of stock and real estate markets will have a lot to say about whether those dreams and hopes are achieved.

65 Marcellus Wells Cited For Casing & Cementing Violations

Through August 2011, 65 Marcellus wells were cited for casing and cementing violations, according to Laura Legere of the Scranton Times-Tribune in a story yesterday.  See http://thetimes-tribune.com/news/dep-inspections-show-more-shale-well-cement-problems-1.1205108#axzz1YPDNCmnB

Legere points out that casing and cementing problems can lead to gas migrating and contamination of water wells. She reports that there have been three dozen cases of gas migrating from gas wells to contaminate people's water wells in Northeast Pennsylvania. 

Legere asserts that the number of casing and cementing violations through August 2011 were 1 greater than the number in 2010.  The statistic would indicate that the industry as a whole has much more work to do to achieve excellence in this critical area.  It also underlines the need for strong oversight of gas drilling and that must include insuring sufficient staffing.

Secretary Krancer is quoted in the article as saying, "One case of methane migration or well contamination is one case too many." The goal should indeed be to eliminate all methane migration cases.  To do so, casing and cementing must be done excellently by all companies.

PA Nox and Sox Air Pollution Plummets: Learn Why

Pennsylvania's air is getting a lot cleaner, as the amount of nitrogen oxide and sulfur dioxide pollution drops sharply just from 2008 to 2010.  Indeed sulfur dioxide pollution from Pennsylvania sources fell by more than 50% from 2008 to 2010, while nitrogen oxide emissions dropped about 27%.

By tons, Pennsylvania sulfur dioxide emissions declined from 813,914 tons in 2008 to 413,438 tons in 2010, according to the EPA Clean Air Market website.  Nox emissions dropped from 183,657 tons in 2008 to 133,351 tons in 2010.

What explains the major reductions?  Is it the economic struggles of the last 3 years?  No.  The declines are much bigger than any reduction in electricity demand or GDP. In fact national GDP has grown every quarter since July 1, 2009. What does then?

Many coal-fired electricity generation plant owners have installed scrubbers or other pollution control equipment that is cutting sharply nox and sox emissions from those sources in the last 2 to 3 years.  The substantial investments made at plants like Hatfield Ferry and Brunner Island in 2009 to reduce their emissions then puts a harsh glare on other plant owners who have yet to install pollution controls and now sue or lobby for delay in meeting important public health goals.

In addition, some coal or oil plants like Eddystone 1, Cromby 1, Hunlock have closed or switched to gas in Pennsylvania in recent years.  Cromby 2 and Eddystone 2 are two more highly polluting plants that will close by May 1, 2012 and will run until then just to meet reliability needs or about 5% of the time that they ran in 2009. 

Many other old-coal fired power plants outside of Pennsylvania--for example 18 TVA units; 12 AEP units; 11 Progress Energy units, and more--that emit pollution that blows into Pennsylvania have announced that they will close in the next 5 years.

The movement to gas fired generation too has played a role in cutting nitrogen oxide and sulfur dioxide emissions.  As gas has increased from providing just 2% of Pennsylvania's electricity to 13%, coal's Pennsylvania market share has fallen from 57% to 48%, though that is still higher than the national 44% of electricity now coming from coal.

In the first 6 months of 2011 sulfur dioxide emissions were 160,000 tons, indicating that they will decline perhaps another 25% from 2010 levels or to about 325,000 tons annually. 

Nitrogen oxide emissions were 73,000 tons in the first 6 months and that may mean no further decrease or even a 10% increase in nox emissions in 2011 compared to 2010.  No final judgment is possible until data is available for the last 6 months of 2011. 

Nox emissions will be the focus of much attention as a result of gas drilling and the EPA's July 28, 2011 proposed air emission rule for gas drilling.  Gas must remain a powerful answer to the problem of dirty air by using the available technologies that sharply reduce emissions from the production of gas.

The data for 2008 to 2010, however, show an unmistakable, dramatic reduction in the pollution loading of our air that causes illness and premature deaths.  That is important and good news.

Despite this major progress, more is needed to insure that everyday the air in Pennsylvania is healthy.  Communities across Pennsylvania had Code Orange unhealthy air multiple times this summer or air that required the young, elderly, and those with repiratory conditions to stay indoors.

18% Hold Key To Global Warming Policy

To enact major policy change in the USA generally it is imperative to either have 75% support from the public or significant support in both the Democratic and Republican parties.  An exception like health care reform in the last Congress when nothing close to 75% of the public and virtually no Republicans supported the changes that became law prove the general rule.

On global warming 65% of the public believes global warming is real and caused by humans pumping heat trapping gas into the atmosphere and raising the concentration of that gas from 280ppm to 393ppm over the last 150 years.  That's an impressive number but not enough support to overcome well-financed attacks, especially since the Republican party today largely outright denies global warming is real. 

One united party can gridlock the US Senate, given the ubiqitous use of the filibuster by the Minority Leader Senator McConnell from Kentucky in the last two Congresses, turning the Senate into a body where 60 votes are needed to enact most bills.

To change the political climate, the key population groups are not the 65% accepting climate science or the 17% that denies global warming is happening (see prior post about the AP/Ipsos poll).  The pivotal segment of opinion is the 18% that say temperatures are rising but the cause is natural.  This group should be the focus of education and outreach work.

If about half of that 18% moves to the camp that human activity is causing temperatures to rise, then two things happen.  First, 75% of the public will then accept climate science and our democratic system generally responds when 75% of the public coalesces. 

Then significant numbers of elected Republicans also will accept climate science. Why?  The natural-warming group is heavily concentrated in the Republican Party. 

Splintering the natural-warming group will move enough elected Republicans to change the political climate and is the key to global warming policy.

Sunday, September 18, 2011

Americans Increasingly Believe Global Warming: Will GOP?

It might surprise some since Congressional action to address directly global warming is dead but 83% of Americans now believe global warming is real, according to an AP/Ipsos poll released on friday.  Last year the poll found 75% believed global warming was real.

Why the rising numbers of Americans saying global warming is real, especially when Rush Limbaugh, Tea Party Republicans and movement conservatives have made denial of global warming a litmus test for the Republican Presidential nomination? And when other polling shows that only 25% of Republican primary voters believe global warming is real and caused by human activity?

Some would say the AP/Ipsos Poll is just wrong.  The poll had a big sample--over 1,000--and a small margin of error.  Its basic findings are also supported by other polling so the poll is likely close to the mark of where public opinion stands.

The AP/Ipsos poll also found that, of the 83% that believe global warming is real, 71% believe that human activity is responsible for the warming, while 27% believe natural variation explains the documented warming of 2 degrees.

That means that 65% of Americans believe global warming is both real and caused by man, while 35% believe that the warming is natural or not happening at all.

The increase in the number of Americans believing global warming is real most likely is a result of their daily weather.  A portion of the population's views on global warming seems impacted by what they experience.  Temperatures in 2010 and now in 2011 are among the highest ever. 

Texas for example has shattered all heat records and is in the grips of the worst drought in its history.  Regional global warming models predicted declining precipitation in Texas and that has become reality with a vengeance.

This year there have been 10 weather disasters that have inflicted $1 billion or more in damages in the USA.

The heat, droughts, floods are all likely convincing more Americans that global warming is real.  But will the GOP drop its denial of global warming?  Governor Huntsman is the only Republican Presidential candidate that direclty says he accepts climate science. 

Mitt Romney has done what?  Waffle. Flip. Flop. Pretzel. Who knows what he thinks because he does not know. The usual profile in leadership courage from Governor Romney. 

All the others have flat out denied climate science, something that George W. Bush and George Bush Senior did not do.

Why the movement against climate science in the GOP?  That is where the votes are within the GOP.  The 35% of the public that either deny the reality of global warming or say that the rising temperatures are natural variation are overwhelmingly Republicans.  The candidates are playing to the crowd, with the exception of Governor Huntsman.

Friday, September 16, 2011

Austerity Economics Pushes PA Unemployment Up To 8.2%

Since May 2011, the Pennsylvania unemployment rate that had been heading down for 16 months started to head up.  In August it jumped to 8.2%.

The Pennsylvania economy that was a national leader in job creation from January 2010 to April 2011 is no longer doing better than the nation.  State unemployment since May, 2011 has risen from 7.4% to now 8.2%.

Austerity economics is "working" in Pennsylvania.  Look at just education budget policy.

Today the Allentown Morning call reported that the state lost 14,000 school jobs this summer due to state budget cuts. 

Everyone of those 14,000 destroyed education jobs led to the loss of at least another one-half job.  Just the education cuts alone destroyed 21,000 jobs.  That is getting close to some estimates of all the direct jobs created by the Marcellus boom.

According to the Allentown Morning Call, a survey of 294 school districts documented this summer the average job loss per district of 28.5.  Forty-four per cent of the districts also reported that they had eliminated electives; 35% ended tutoring; 25% cut summer school; 41% delayed buying textbooks; and 58% did not make technology improvements.

Slashing education is a sure way to hurt the economy in the short-run and long-run.  Just look at what's happened since May and what was happening before May.

Patriot-News Story Re Drilling Industry Managing Floods

The Patriot-News story about the performance of the gas industry during the torrential rains and floods of last week can be read at this link: http://www.pennlive.com/midstate/index.ssf/2011/09/floods_didnt_affect_marcellus.html.

Duke Energy Constructing New PA Wind Farm In Gas County

Lycoming County in Pennsylvania is hosting substantial gas drilling and soon will be home for a 69 megawatt wind farm that Duke Energy is now constructing. See http://www.duke-energy.com/news/releases/2011091301.asp. The wind farm will provide enough emission free energy to supply 20,000 homes.  It is scheduled to begin operations in September 2012.

The Delaware Municipal Electric Corporation will buy all the power for 25 years from the Laurel Hill Windpower project, locking in power prices at today's low levels. Very smart.  This purchase also demonstrates that Pennsylvania can benefit from selling renewable power to supply the needs of other states.

Meanwhile Pennsylvanians can encourage wind power and renewable energy development in the Commonwealth by buying green power products that source their supply from projects located in Pennsylvania.  Buying Pennsylvania wind or renewable energy cleans the air and creates jobs right here.  Buying a national green energy product may help Texas but will not benefit Pennsylvania much, with the exception of displacing global carbon emissions.

Once Laurel Hill is completed, it will join the 70 megawatt North Allegheny wind farm in Blair and Cambria counties as Duke Energy's second Pennsylvania wind farm.

Duke Energy plans to have 1,500 megawatts of wind energy operating nationally by 2013 and have another 5,500 megawatts of wind in its development pipeline.

Franklin Center Files Complaint Against NYT Gas Reporter

The multiple censures of the NYT gas reporter by the NYT Public Editor may be just the start of accountability for him.  The Ben Franklin Center has filed a letter complaint with Phillip Corbett, the NYT Standards Editor, the internal management figure charged with enforcing NYT standards for reporting.

Go to http://www.franklincenterhq.org/2705/franklin-center-new-york-times-reporter-violated-standards/.

The letter is 8 pages long, about as long as one of the NYT gas reporter stories, and details the numerous violations of NYT reporting standards. It is a must read.

The Standards Editor is part of the management supervision of reporters at the NYT, unlike the Public Editor that serves as an ombudsman for readers and cannot discipline reporters directly.

Despite the multiple censures of his reporting by the NYT Public Editor, Cornell University has invited the NYT Gas Reporter to deliver a lecture on gas drilling in October. 

As NJ might say, Professor Howarth and the NYT gas reporter, "Perfect Together."

Thursday, September 15, 2011

Gas Drilling Gets High Grade For Managing Rains & Floods

The floods and massive rains hit parts of Pennsylvania where shale gas drilling is being done and were an unprecedented test of the gas industry's operations and strength of rules to protect the environment during extraordinary circumstances and stresses.

How did the industry do in protecting the environment during the floods and rains? Now one week later it would seem that the gas industry deserves a high grade for operating in a manner that prevented any significant pollution.  The same cannot be said for sewer operations in many parts of the state that were overwhelmed and sent large volumes of contaminated raw sewage into rivers and streams.

Don Gilliland writes an article in today's Patriot-News  (http://www.pennlive.com/) that reviews information from industry, industry opponents, and regulators and reports that no major pollution incident has been attributed to gas drilling. 

At one point, according to Gilliland, PennEnvironment put a photo of a drilling rig under water on its website with the message: "Here's more evidence Marcellus Shale drilling pads should NOT be allowed in floodplains."  But the group took down the photo when it realized it was of a drilling rig in Pakistan.

During the rains, the biggest concern were pits to store water used by some companies in the gas drilling industry, but many in the gas industry do not use pits anymore.  Instead mostly tanks or so-called closed loop systems that keep water in closed containment systems at all times are used. 

Moreover the regulations governing open pits require the design of the pits to be able to withstand at least 24 inches of rain falling directly into the pit and to prevent any run-off from flowing into it.

The rains and floods were a huge stress that would have exposed substantial problems in the gas industry's operations if it was not well prepared.  The absence of incident reports indicates that a high grade has been earned.

USA Loses 16% Of Drinking Water Daily

America's water system has a huge cumulative leak. An incredible 16% of all water never makes it from the water plant to the tap. Some cities have leaks amounting to 40% of total water.

Leaks mean that 7 billion gallons of drinking water is lost every day. But consumers pay for the water that never makes it to them, and so does the environment

America's roads, bridges, and water lines all add up to crumbling national infrastructure.

We are not investing enough to have a world class infrastructure and right now is the perfect time to do so with interest rates at rock bottom levels and consumer demand weak.

Read Great Comment About Wigley Study

Miguelito has gotten under the hood of the Wigley study that highlights the climate paradox of replacing coal with gas or anything and has posted a great comment to my September 13th posting about the study.

You should read it. You will know more about this important matter by doing so.

Wednesday, September 14, 2011

Solar For 4 Million Homes In Pipeline

More than 24,000 megawatts of solar power at 1,865 non-residential projects is in the USA development pipeline, according to Solarbuzz.com. This development pipeline jumped another 7,000 megawatts from 17,000 megawatts in the last 3 months. These are amazing numbers that portend the next big shock to the energy business.

The 24,000 megawatts of non-residential projects would be enough power for about 4 million homes. The number does not include residential solar systems that are being deployed so understates the amount of solar capacity in development or construction.

Why the sharp increase in large solar projects this summer? No new government program explains the growing market.

Instead sharply falling prices this year have triggered large demand increases. Solarbuzz reports that 20% of the 1,865 solar projects it tracks have costs at or below $3.75 per watt or $3.75 million per megawatt.

California has 61% of the projects in the pipeline. Its dominance is explained by great sunshine, high electricity rates, and supportive state policies.

After California come Arizona, Nevada, and Texas with the most projects. Arizona has 8%; Nevada 7%; and Texas 5% of the pipeline.

Nationally Gas Provides Twice The Power It Does In PA

Over the last decade Pennsylvania has seen the share of its electricity coming from coal decline from 57% to 48%. That decline of 15% means that Pennsylvania is just a bit above coal's approximately 44% national market share.

Gas grew in the same period from just 2% of Pennsylvania's power to 13%. That is strong growth, but puts Pennsylvaia well below the 24% of electricity that gas provides nationally. Pennsylvania also had 8,000 megawatts of new gas plants built from 2000 to 2008. But most of those gas plants ran about 30% of the time due to high gas prices making them uneconomic.

Shale gas production that has rocketed up and now provides 30% of all gas has caused gas prices to fall from $13 for a thousand cubic feet to now $4.

Given the huge gas supply in Pennsylvania and today's low gas prices, no excuse exists for running old coal plants without pollution controls. Such plants emit toxic pollution like mercury and arsenic, soot and smog causing pollution. Clean them up or switch to gas.

Key Social Security Facts Shaping Presidential Politics

Why is Mitt Romney trying to attack from the left Rick Perry on Social Security? The answer would be that 27% of households have a Social Security recipient and that there are 53.4 million Social Security recipients.

Romney sees an opening in these numbers and now presents himself as the defender of Social Security and Perry as its executioner. The argument gets reduced to a sound-bite of whether the program is a Ponzi scheme or fraud or monstrous lie, all attacks hurled at it by Perry.

Will FDR's crown jewel save Mitt Romney? Does Romney have any better option to derail Perry?

Tuesday, September 13, 2011

Perry Has One Sparring Partner Left--Mitt Romney.

Last night's Republican Presidential debate last night proved that ego alone explains why Gingrich, Cain, Santorum and Huntsman remain on the stage.  None of these men have the sense to leave, and no poll number is low enough to bring them to their senses (see the CNN poll below) so will someone show them the door? 

Governor Perry meanwhile had a good night,  taking some punches and landing doozies on Governor Romney, at least with the Republican faithful. Judging by the crowd's reaction, attacking Social Security as a "monstrous lie," "fraud," and "ponzi scheme" is good politics in Republican primary fights. 

Life has ironies, and one would be that both Social Security and the shale gas industry have been falsely charged with being a ponzi scheme.  Whether the attack comes from the left or right, hurling the ponzi scheme charge is a debating nuke in the age of Madoff.

Bachmann who has called Social Security a fraud and has run a credible campaign, until this moment, should now walk through the exit door and  prove that she has a political future by doing so. Show some discipline.

The wheels are off Bachmann's campaign, with her polling numbers at 4%, behind Newt, and Ed Rollins dropping her like a bad betting ticket.  Trailing Newt is really low. 

Look no further than Rick Perry to know why Bachmann is done.  Perry is a pro. 

Bachmann should do a Pawlenty and get out of the race, except endorse Perry and not Romney, as Pawlenty did yesterday.

CNN published a poll last night showing Perry at 30%, Romney at 18%, Paul 12%, Gingrich 5%, Cain 5%, and Bachmann 4%.  The Fox News Poll also has Bachmann at 4%.  Don't ask about Santorum and Huntsman! 

This is really a two person race, even though Paul is in double digits, since he has as much chance of winning the Republican nomination as President Obama.  Governor Perry has the race in his hands, with Mitt Romney reduced to a sparring partner, if not a punching bag. 

Monday, September 12, 2011

Burning Trash Burries Harrisburg In Debt: Ugly Numbers

The Harrisburg incinerator was built in 1969 for $12.5 million that was debt financed. It was supposed to be a better, cleaner way to dispose of trash. But it has been instead not cleaner and a road to financial ruin.

The Wall Street Journal reports in an excellent article in today's Money & Investing section that Harrisburg has gone back to the capital markets to borrow at least 11 times since 1969.

The debt binge began in 1977 when Harrisburg borrowed $19.2 million for the incinerator; then $9.7 million in 1984; $25.3 million in 1985; $40 million in 1993; $55 million in 1998; $25 million in 2000; $17 million in 2002; $200 million in 2003; and $50 million in 2007. Outstanding debt is $310 million.

What did all that money buy? An incinerator that is worth $124 million, judged by the offer to buy it for that amount from the Lancaster County Solid Waste Management Authority. It also bought consultants and financiers.

Just between 1998 and 2003 $12 million went to financing costs, including fees.

Money was used for repairs and to install pollution contols, as once the incinerator was the dirtiest in America, putting large amounts of soot and dioxin and other toxics into the air.

Tons of money. All of it debt that needed the incinerator to work well and sustained high prices for waste disposal to have any chance of repayment.

Until Covanta recently took over its operations, the incinerator did not work at all for weeks or not well. Waste disposal prices are not high enough to finance the debt.

The incinerator is a lesson for all municipalities about the perils of debt and commercial enterprises.

Kalamazoo River Oil Spill Damages Water More Than All Marcellus Drilling

Marcellus gas drilling is major industrial activity that cannot be done without environmental impact, but its cumulative impact on water to date probably is less than the damage done by the single oil spill on the Kalamazoo river in Michigan.

There one spill of 834,000 gallons of oil 14 months ago has closed 35 miles of the river ever since the day of the spill. According to the September 10th New York Times, the oil spill will cost $500 million to clean up.

Oil is inherently orders of magnitude more damaging and threatening to water quality than gas. According to the NYT, each year 100 significant oil or hazardous liquids spills from just pipelines take place. Another major oil pipeline spill just this year fouled the Yellowstone River, a natural jewel.

Despite the significant leaks and spills from pipelines, pipelines are actually the safest, cleanest means of transporting oil. Therein lies a window to the full toll to water caused by oil releases.

To get the full impact of oil releases to the environment, one would need to add the enormous quantities spilled from ships, trucks, tanks, industrial processes, homes.

Few things would do more for water quality than using more gas to displace large quantities of oil. While that is true, it is not a reason for regulators of the gas industry and companies to become complacent about the impacts of gas production on water.

Recycling of driling wastewater, excellent practices to limit erosion and sediment impacts, reducing and containing spills at drilling sites, preventing gas migration are daily challenges requiring daily focus. The goal must be excellence every day in operations and regulation.

PA Solar Hits Triple Digits

100 megawatts of solar generation and counting is now operating in Pennsylvania. Prior to 2008, Pennsylvania was in single digits for solar, with less than 10 megawatts.

The strong growth has been driven by policy and sharply falling prices for solar systems that have declined from $9 per watt in 2007 to about $4 to $5 per watt today, depending on system size. Prices continue to decline by about 1% per month.

The falling prices are a result of successful policies in Pennsylvania, the USA, and the world to increase the demand for solar panels and the size of the solar industry to provide them. Economies of scale, advances in panel efficiency and other technical improvements have all created a growing industry and falling prices.

In Pennsylvania the policies that have created about $500 million of solar investment to date included the $100 million PA Sunshine program funded by the 2008 Act 1 Alternative Energy Fund and the 2004 Alternative Energy Portfolio Standards Act. The Act requires that 0.5% of all electricity consumed in PA come from solar by 2021.

Pennsylvania has enough solar operating to meet the 2013 requirement. Pennsylvania is ahead of schedule.

Sunday, September 11, 2011

Never Forget: Facts of Sept. 11

Some emotions and memories are as permanent as the most indelible facts.  That is true of September 11, 2011, a day never to be forgotten and always to be remembered.

Part of that remembrance must be the facts that begin to describe the heroism, horror, and sorrow of the day.

Total killed 2,819.  Then 343 firefighters and paramedics killed.  Sixty New York Police Department and New York Port Authority officers killed.

Number of children who lost a parent was 3,051.  The number of countries who lost a citizen was 115.  20% of Americans new someone hurt or killed.

All these facts and more have been compiled by New York Mag (nymag.com) at "9/11 by the numbers."

Thank you to the firefighters, police, paramedics who rushed into the horror and saved thousands and gave their lives in huge numbers.  No paycheck can begin to repay our debt.

Thank you to the passengers on Flight 93 that saved hundreds, possibly thousands, by fighting for control of the plane.

Thank you to the men and women of our Armed Forces who still bring to justice the terrorists that murdered.

Never forget.

Friday, September 9, 2011

Voters Want To Oust Their Member of Congress

Do voters mean it? Just 41% say they will vote to re-elect their member of Congress, according to a CNN poll. That is an extraordinary number, since never had less than 50% said that their member of Congress should be re-elected.

If voters stay angry and do what they say, the 2012 election could be an historic landslide against incumbents.

But you have to wonder. Always in the past, even when Congress hit the popularity skids, voters supported their member of Congress.

But the approval of Congress is now at historic lows, the low teens. Just perhaps voters do mean it.

My Home Town & Region Hit By Massive Floods

Large parts of Hershey, Pennsylvania which is my home town and central Pennsylvania are flooded. As of last night, 5 lives have been lost, including a man in Hershey who died when he was bailing water out of his basement, and it collapsed around him. Another woman drowned in her car in Lancaster County, while truly heroic fireman saved with no time to spare the lives of 4 others, including an 18 month baby, caught in the same roaring water that turned a country road into a death trap.

Waters are to the roofs of many businesses and homes. Roads and bridges have been severely damaged and blocked, including as of yesterday Interstate Route 81 north bound and the Pennsylvania Turnpike for a portion east of Harrisburg.  Mudslides are a regional hazard.  Damages run into the billions of dollars.

Flood waters overwhelmed Zoo America in Hershey, where the staff saved most animals, but 2 Bison could not be reached, were drowning, and had to be shot.  Boil water advisories are in place for many communities as a significant number of water and sewer plants are damaged or knocked out of service.

Friends and neighbors are dealing with real loss.  Pennsylvanians are a tough, caring, brave people standing on generations of greatness.  Those qualities are the rock in the troubled waters and will be the foundation for the recovery ahead.

Thursday, September 8, 2011

NY EIS Greenlights Marcellus Development

NY's latest draft of its environmental impact statement for Marcellus shale drilling is an exhaustive, thorough examination of all conceivable environmental impacts associated with shale drilling. It is more than one thousand pages. While I suspect only a handful of people have read every word, the EIS finds no show stoppers.

Here are some highlights:

"Accordingly, there is no likelihood of significant adverse impacts from the underground migration of fracturing fluids." Page 12.

"No significant adverse impacts are identified with regard to the disposal of liquid wastes."

NY projects an annual peak of 2,500 wells and average of 1,600 wells per year. It finds that the average land disturbance, including a multiple-well pad, access road, infrastructure will be 7 to 8 acres to produce gas from 640 acres, given horizontal drilling. NY expects 90% of Marcellus wells to be multiple-well pads with horizontal drilling.

It finds that gas drilling will require 9 billion gallons of water per YEAR at peak drilling
and that would be just a 0.24% increase in water demand for NY. Water withdrawals for all uses in NY are now 10.3 billion gallons per DAY.

The EIS proposes substantial environmental protections in all areas, including for air emissions from production equipment and methane leakage.

But New York is moving ahead, separating itself from New Jersey where a moratorium has been imposed. Comments on this EIS will now be taken. In addition formal rules will be proposed in October.

New York's economic analysis indicates Marcellus development will create approximately 55,000 jobs.

Three Key Facts You Must Know

We live in extraordinary times. Here are three vital facts to understanding perils and opportunities ahead.

First, the record low interest rate of 1.9% for a two-year US treasury bond this Tuesday underlines that investors view Uncle Sam as the safest haven and signals that we are threatened by deflation, not inflation. This interest rate and the August job numbers are strong evidence that the US economy is spiraling into contraction or recession.

Second, the US population is growing at the rate of 0.9% per year or a bit more than 3 million people. We need 100,000 plus new jobs every month just to keep up with population growth. Since May job growth has not come close to that benchmark.

Third, in August 2011, the US imported 11% less oil than in August 2010. Why? falling demand for gasoline as high prices trigger reductions in use, increasing biofuels production, including a tripling of biodiesel fuel, and rising domestic oil production. A record number of oil rigs are drilling today in the USA.

These facts flash both promise and peril. Now is an ideal time to push hard for infrastructure and an end to foreign oil.

Wednesday, September 7, 2011

Gas Could Slash Carbon Emissions To Pre-1980 Levels

Canada's announcement that it would phase out coal-fired power plants produces a thought experiment.  What would US carbon emissions be if gas replaced coal at power plants in the USA? 

The Carnegie Mellon University, NETL, and the Worldwatch Institute studies all document that coal emits two times more carbon emissions than gas.  Gas is not zero carbon or zero pollution, but it is much cleaner than coal. In fact it emits approximately 50% less carbon on a life cycle basis, in addition to emitting no toxics or soot.

The enormous decrease in carbon emissions that widespread use of gas could provide is startling when one looks at the total US carbon emissions.

In 2010, US coal fired power plants emitted 1,990 million tons of carbon dioxide and that number would have been cut in about half if gas replaced coal.  Or gas would cut carbon emissions by about 995 million tons.

Total carbon emissions from the energy sector in the USA during 2010 were 5,636 million tons and that was below the 5,996 million tons emitted in 2005.

Subracting the 995 million tons of avoided carbon emissions by using gas and not coal from the 2010 total would reduce US emissions to 4,641 million tons.  A big reduction.

The reduction is so big that widespread use of gas would turn back the carbon clock by more than 30 years.  It would cut US energy sector carbon emissions to levels experienced before 1980.  Emissions in 1980 were 4,770 million tons.  And it would cut carbon emissions about 22% below 2005 levels or 8% below 1990 levels.

These facts are good news, but some must face them. Moreover using gas or electricity more widely in transportation to displace oil would boost the carbon savings produced by gas still further.

 Widespread use of gas reduces soot in the air, toxics in the environment, and heat trapping gas in the atmosphere.

Gas production is an industrial business that must be regulated strongly, especially for its air emissions, and taxed reasonably. But gas offers a substantially less polluting alternative to both coal and oil, in addition to providing economic, consumer, and national security benefits. 

Denying the fact that gas is much cleaner than coal or oil is false and sacrifices the environment and public health. Insisting that gas is strongly regulated reduces its environmental footprint and maximizes its benefits to the environment.

Tuesday, September 6, 2011

US Public Yawns About Climate Change

According to an article by Nathaniel Gronewold of E&E Reporter, Nielsen Global Online reports that 69% around the world expressed concern about climate change, up slightly from 2009, but just 48% of the US public joined in that concern.  Moreover, a sharp 14 point drop in the percentage of the US public concerned about global warming had taken place since 2007.

Nielsen also finds that concern about global warming is lowest in the US and Canada, much lower than in Europe or China, though erosion of concern in China was also documented.

At 48% there is room to argue that the glass of US public support for addressing climate change is either half-full or half-empty.  But there is no doubt that the glass has emptied substantially in the last 4 years.

Reasons abound.  The financial crisis of 2008 and the resulting economic distress has pushed many issues aside.  

Conservatives have successfully made rejection of climate science a litmus test for good standing in the Republican party.  A PPP poll found that just 25% of Republican primary voters accept climate science, with most in Governor Perry's camp of dismissing it or charging it is a fraud. 

Of Republican Presidential candidates, only Governor Huntsman has tweeted his acceptance of climate science as well as evolution and said prophetically, "call me crazy."  Judging by Huntsman's standing in the polls, Republican primary voters are politely doing just that.

I suspect that the decline in concern about climate since 2007 tracked by Nielsen has been evident in most demographic groups but particularly sharp among conservatives and Republicans. 

Climate change in the USA will not be addressed without substantial public support to do so.  As the numbers in support of taking action dwindle, the concentration of heat trapping gas in the atmoshpere rises each year and global temperatures rise each decade.

Summarizing 4 Studies Debunking Prof. Howarth's Life Cycle Gas Study

The recent flood of scientific studies contradicting professor Howarth's junk science study falsely claiming that gas is dirtier on carbon emissions than coal is so big that it needs summarizing.  Impressively, two of the studies refuting Howarth were either done (Worldwatch Institute) or financed (Sierra Club) by a leading environmental organization.  All the debunking studies reach the same conclusion that coal emits about twice as much heat trapping pollution as does gas or gas emits about 50% less heat trapping pollution than coal on a life cycle basis.

Failing to recognize this fact, this truth, would be a real outrage and an assault on the environment.  Here is your scorecard for studies debunking Howarth.

First to debunk Howarth was the National Energy Technology Laboratory that found essentially that coal is twice as dirty as gas or gas emits about 50% less than coal on a life cycle basis.  See the May 23rd posting on the NETL paper at this blog: http://johnhanger.blogspot.com/2011/05/national-energy-technology-lab-latest.html.

The second debunking came from 6 researchers at Carnegie Mellon University whose work was financed by the Sierra Club.  This study focused on the Marcellus shale gas production, finding that coal emitted twice as much carbon as gas on a life cycle basis and that a Marcellus shale well emitted statistically the same heat trapping pollution as a conventional gas well.  See the August 17th posting.  http://johnhanger.blogspot.com/2011/08/carnegie-mellon-life-cycle-gas-study.html.

Third up was a paper from IHS-CERA charging that Professor Howarth in his study distorted and misused gas well data that IHS-CERA had developed.  See the August 25th posting.  http://johnhanger.blogspot.com/2011/08/top-energy-consultancy-critiques.html.

Fourth, and so far last but not least, is the Worldwatch Institute and Deutsche Bank Climate Advisors study that also found that coal was about twice as dirty as gas in terms of heat trapping pollution.  See the August 29th posting.  http://johnhanger.blogspot.com/2011/08/world-watch-institute-study-finds-coal.html.

This list is actually a partial summary.  The Clean Skies Foundation also issued a study, finding that coal is twice as dirty as gas.

Monday, September 5, 2011

Perry's Perfect Start Finishes Bachmann

Governor Perry was on academic probation in college, but he is a brilliant politician. His first strategic goal was to stop Congresswoman Bachmann's momentum that threatened to consolidate dominant conservatives around her and not him.

Mission accomplished. Bachmann will not be the nominee, is falling in the polls, a good 15 to 25 points behind Perry. How did he do it? His credibility as a governor plus red meat for key constituencies did the trick.

The prayer rally in Houston cemented the Christian right to his campaign; his threats aimed at Ben Bernanke rallied the anti-tarp populists and gold bugs; and his blasts at social security as a "monstrous lie" thrilled the financial industry, libertarians, and privatizers.

At the same time Perry stopped Bachmann cold, the President's polling numbers tumbled, making Perry competitive with the President, thereby lessening Romney's electability argument.

A perfect start requires both smarts and luck.

Perry would have been delighted with successfully vaulting past Bachmann, while being a few points behind Romney. But his perfect start means he is now 6 to 14 points ahead of Governor Romney, the establishment's candidate or Karl Rove's man.

And so Perry is way ahead of schedule in achieving his second strategic goal: consolidating conservatives behind him in a head-to-head struggle with an isolated Romney in his establishment fort.

Is there anything Romney can do to turn the tide? Probably not, but I will offer a Hail Mary play for Romney in a coming post.

Sunday, September 4, 2011

Dark Lining In Mom's Good Home Insurance News

My mother shared good news with me yesterday when I sat down with her at the dinner table. She reported that her home insurance premium had fallen $300 or 30%.

I asked her why the premium decrease, and she said because the value of her home had fallen 30%. A dark lining indeed in the piece of good news. My mother's home value reflects almost perfectly the national average decline in home values of about 30% since the peak of real estate prices in 2006.

Deflation in home values is an anchor dragging the US economy toward shrinking GDP and near zero inflation. How austerity economics will do anything other than make things worse mystifies me.

Friday, September 2, 2011

8 Keys About Public Opinion of Gas Drilling

The Franklin and Marshall poll on public opinion of the Pennsylvania gas industry is a treasure trove of insights.

Here are my key interpretations of the data:

1. Despite a massive amount of mostly negative and critical scrutiny of the gas drilling industry, the gas industry remains standing and ahead on all cards if this were a boxing match, with the  public favoring the gas industry 2 to 1.

2. Why does the public have a favorable view of the industry?   The industry has delivered economic benefits; the public expects those benefits to grow and broaden in several ways, including a drilling tax; and the industry has avoided any major environmental impact to substantial populations like drilling causing smog. There have been negative environmental impacts like truck traffic, erosion issues, and a small number of private water wells contaminated by gas or spills.  But big problems with streams or drinking water supplies have not taken place or the industry would have lost public support.

3. The industry can count on about a third of the public staying with it almost no matter what. 31% of the public strongly favors the industry; 20% opposes a drilling tax; and 20% favors more drilling in the state forests.  This group are the folks who sing, shout, scream: "Drill Baby Drill!"

4.  But the current 2 to 1 support for the industry is conditional and fragile, because another 34% of the public that currently favors the gas industry harbors doubts. For example, just 39% of the public believes the benefits of drilling outweigh the environmental impacts, while 35% believe that the environmental impacts outweigh the benefits of drilling.  A critical 26% is not sure. 

5. Two things must happen for the industry to maintain the critical 34% of opinion that supports the industry but not strongly so.  First, the industry must continuously improve operations, resolve problems that do occur honestly and quickly, and avoid any widespread negative impacts on the public such as air pollution impacts. 

Second, this middle group expects to see broad and real benefits for all Pennsylvanians if they are to continue to support it.

6.  This middle group of 34% also favors a drilling tax, because they see the tax revenues and its use for important needs as a way of making every Pennsylvanian a direct beneficiary of hosting the gas drilling industry. Only 20% oppose the drilling tax and they are all concentrated in the group that strongly supports the industry.  Political opposition to a drilling tax carries considerable risk. Paying a drilling tax is now indispensable for the industry to maintain public support.  Another demonstration of real benefits to the public would be access to cheaper natural gas for transportation or heating fuels as well as replacing old, highly polluting coal plants.

7. The public views drilling on public lands and private lands completely differently.  While the public is willing to tilt toward economic development on private lands, it strongly favors conserving the natural integrity of its public lands.  Further drilling in state forests will trigger a tsunami of opposition.

8. Drilling in state parks will trigger a 9.5 earthquake plus a 30 foot tsunami.  Any company considering drilling in state parks should reconsider its business plans. Furthermore drilling in state parks would be a public opinion disaster for the entire industry.

Thursday, September 1, 2011

66% of Pennsylvanians Favor Gas Industry & Taxing It

A new Franklin & Marshall College poll has a fascinating set of findings that paint a complex public opinion picture.  The gas industry can take comfort from the finding that 66% of Pennsylvanians have a favorable view of it and 31% with a strongly favorable view.  But not too much comfort if it is smart.

The poll also found that a small plurality of 39% agreed that the benefits of drilling outweigh the costs, while 35% thought the environmental costs of drilling outweighed the benefits.  35% said drilling improved the quality of life and 26% said drilling reduced the quality of life.

Drilling in the state forests is a buzzsaw, according to the poll.  72% of Pennsylvanians opposed further drilling in state forests, with 54% strongly opposed.  Only 22% favored more forest drilling.

On taxation, it is tax baby tax.  65% favored taxing drilling, with 45% strongly in favor. Just 21% said they oppose taxing drilling.

Pennsylvanians have opinions that reflect the tensions, the positive opportunities, and the challenges as well.  All involved in the gas industry debate would do well to understand the complexities of this opinion picture.  See an article on the poll at http://citizensvoice.com/news/pa-residents-favor-gas-tax-1.1196328#axzz1Wh37dXLw.

USA Starts Kicking Foreign Oil Habit! Oil Imports Down 11%

It looks like the USA has an emerging energy policy that is actually working to break our addiction to foreign oil. 

Oil imports in August 2011 where 11% lower than in August 2010, according to an article in the August 27th Wall Street  Journal.  These 2011 oil import declines build on lower imports in 2010 when oil imports were their lowest level since 2003.

What is the emerging energy policy that has begun to wean the USA off of foreign oil?   Rapidly rising biofuels production driven by a federal renewable energy standard, significantly raised federal fuel efficiency standards for cars, growing usage of natural gas and electricty to power transportation, and rising domestic US oil production add up to a recipe, almost a policy, for ending foreign oil imports.

Yet, providers of addiction treatment know that beating an addiction is a daily battle for the patient.  And the progress made in 2010 and 2011 could be easily reversed, unless the policy needed to end our foreign oil addiction is boosted.

Specifically, while the federal policies are in place to increase biofuels and increase vehicle fuel efficiency, no coherent federal or state policy exists on promoting the use of gas and electricity in transportation.  This is a major hole in policy that must be filled.

High global oil prices as long as they last will provide major financial incentives for oil drilling in the US and shale oil is a major new resource.  But will high global oil prices persist? 

Given booming Chinese and Indian demand for oil, the odds are high that global oil prices will be at least where they are today and quite likely much higher within the next 5 years.

While fueling domestic oil drilling, those higher global oil prices mean that another oil price shock is likely around the corner.  Our economy can barely afford $80 per barrel oil and US economic growth is crippled by oil prices at $125 per barrel or higher. 

We must reduce our oil consumption and end our reliance on foreign oil to protect our economy and national security.  While few Americans know it, important progress in doing both is now underway.  But our progress is fragile and must be nurtured with further smart policy.

US Oil Drilling Reaches Record Levels

High global oil prices and a US economy that didn't collapse into Depression in 2008 have combined to create record oil drilling in the America.  Baker Hughes, the gas and oil service company, tracks drilling rigs and reports that 1069 on-shore rigs are now drilling for oil, a record number since it began its index in 1987.

The number of oil drilling rigs was about 250 in 2001 and again in 2009 when oil hit $30 in December 2008 as the world hurtled toward depression.  A four-fold increase in oil drilling is remarkable and reflects both the record number of drilling rigs now operating and the near collapse of the US oil drilling industry in 2001 and 2009.

The massive amount of oil drilling that now includes shale oil deposits has been instrumental in increasing domestic, US oil production and reversing a decades-long decline. As noted in the Wall Street Journal, 3.9 million barrels per day of oil are produced from on-shore American wells, rising 5.9% from last year's improving production, and the most in a decade.

The US oil fields are not any longer in decline.  That is big news.  How long the increased production continues and how much higher it goes are equally big questions for the future.

NTSB Highlights Rising Pipeline Fatal Accidents

Yesterday, the National Transportation Safety Board issued its report on the natural-gas pipeline explosion that killed 8 in San Bruno, California on September 9, 2010.  The NTSB stated that the accident was caused by defective materials and welding when the line was built...back in 1956.  It further found that the owner of the line, the utility PG&E, had not inspected the line appropriately and that state regulators had failed to provide strong oversight.

In sum, this is a case of infrastructure failure caused by shoddy, original work, poor maintenance and inspection, aging pipe, and lax regulation.

Fatal accidents at large pipelines are rising, with 9 deaths in 2008, 13 in 2009, and 22 in 2010, according to the NTSB. This trend must be reversed and that means more investment in replacing old lines, more investment in testing and maintaining lines, and stronger regulatory oversight.  This trend is also another data point documenting the enormous under-investment in all kinds of infrastructure in America.