Post image for Where Does America’s Oil Come From? (An Update)

In 2005, 60% of all petroleum consumed in the U.S. came from imports. The conventional wisdom then and for several years thereafter was that America was fated to become ever-more-dependent on increasingly costly petroleum imports.

Peak oil alarm was in vogue, popularized by books such as Peak Oil Survival: Preparation for Life after Gridcrash (2006), Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy (2006), A Crude Awakening: The Oil Crash – We’re Running Out and Don’t Have a Plan (2007), Hubbert’s Peak: The Impending World Oil Shortage (2008), and Confronting Collapse: Energy and Money in a Post Peak Oil World (2009).

M. King Hubbert, the originator of peak oil theory, correctly predicted in 1956 that U.S. domestic petroleum production would peak between 1965-1970. He also forecast a peak in global production by the late-2000s. In 2008, many commentators interpreted spiking crude oil prices as confirmation of Hubbert’s theory.

But Hubbert, who died in 1989, did not live to see the “shale revolution.” During the past decade, advances in directional drilling and hydraulic fracturing have made it economical to extract oil from the pores of rock. Although U.S. petroleum production is still lower than it was at its peak in 1970, it has increased every year since 2008 with no end in sight.

Citi GPS, a highly respected analytic group, argues that “surging supply growth” from fracked shale formations, deep-water wells, and Canada’s oil sands could “transform North America into the new Middle East by 2020.” Peak oil, if it exists at all, is likely decades away, not around the corner, as the books cited above assumed.

In a previous post, I discussed the Energy Information Administration’s  July 2011 analysis of U.S. dependence on foreign oil. The EIA updated its analysis in May 2013. What has changed?

Basically, there’s more of the same. Already by 2010, more than half of all the oil we consumed came from the U.S. But whereas the balance then was 51% domestic and 49% imports, the balance as of 2012 was 60% domestic and 40% imports (exactly the reverse of the percentages in 2005).

imports_domestic_petro_shares_demand-small 2010

imports_domestic_petro_shares_demand_2012

[click to continue…]

On Monday, May 20, in room 406 of the Senate Dirksen Office Building, the Competitive Enterprise Institute held a Congressional staff and media briefing on “EPA’s FOIA Scandals: ‘Richard Windsor,’ Gina McCarthy, and the Abuse of Power,” given by Chris Horner, author of The Liberal War on Transparency and CEI Senior Fellow. Video of Chris’s presentation is available below.

EPA’s FOIA Scandals: “Richard Windsor,” Gina McCarthy, and the Abuse of Power from CEI Video on Vimeo.

Post image for Social Cost of Carbon: Interagency Group Predictably Predicts Climate Change Worse Than Predicted

Hold the presses! A U.S. Government interagency working group has just released its updated Technical Support Document (TSD) on the social cost of carbon (SCC).

This is joyous news in some circles. “The ‘Social Cost of Carbon’ Is Almost Double What the Government Previously Thought,” Climate Progress enthuses. Why are they pleased? Because the higher the SCC, the stronger the (apparent) case for suppressing the production and export of hydrocarbon energy in general, and for blocking the Keystone XL pipeline in particular.

SCC is an estimate of how much damage an incremental ton of carbon dioxide (CO2) emissions does to humanity and the biosphere. SCC estimates are driven by assumptions about such issues as climate sensitivity (how much warming results from a given increase in CO2 concentrations), climate impacts (how warming will affect weather patterns and sea-level rise), economic impacts (how changes in global temperature, weather, and sea-level rise will affect agriculture and other climate-sensitive activities), and technological change (how adaptive capabilities will develop as climate changes).

Modelers feed the assumptions into computer programs called “integrated assessment models” (IAMs). By tweaking those values, the modeler can get pretty much any result he desires. Outcomes also vary based on the discount rate selected, i.e., how much people are assumed to value income in the future compared to income in the present.

Using three IAMs, three discount rates (2.5,% 3,% and 5%), and a fourth value representing low-probability catastrophic impacts, the interagency group calculates four SCC estimates for the year 2020. In the working group’s 2010 TSD, the SCC estimates were $7, $26, $42, and $81 (2007$). In the updated TSD, the corresponding estimates are $12, $38, $58, and $129 (2007$). Excuse me, but even for the high-impact projections, the updated estimate ($129) is 59% higher than the 2010 estimate ($81), which is more than a tad shy of “almost double.”

Let’s cut to the chase. Those who say the SCC is bigger than the government previously thought merely recycle the old saw that climate change is “worse than scientists previously thought.” They are mistaken. The climate change outlook is better than we have long been told.

One reason the updated estimates are higher is that the IAMs contain an “explicit representation” of sea-level rise “dynamics.” Are the modelers keeping up with the scientific literature? Consider two recent studies

  • King et al. (2012): The rate of Antarctic ice loss is not accelerating and translates to less than one inch of sea-level rise per century.
  • Faezeh et al. (2013): Greenland’s four main outlet glaciers are projected to contribute 19 to 30 millimeters (0.7 to 1.1 inches) to sea level rise by 2200 under a mid-range warming scenario (2.8°C by 2100) and 29 to 49 millimeters (1.1 to 1.9 inches) under a high-end warming scenario (4.5°C by 2100).

If 21st century sea-level rise is more likely to be measured in inches rather than feet or meters, shouldn’t SCC estimates decline?

And what about the 15-year period of no-net warming, which the climate science establishment did not predict and still struggles to explain? The warming pause is hard to square with the mantra of “worse than we thought.” It is evidence that the SCC is lower than they thought.

Let’s look at the disconnect between what they predicted and what happened.  The graph below comes from NASA scientist Roy Spencer[click to continue…]

Post image for The Inanity of the Global Solar Panel Market

Last week, the Wall Street Journal gave a fascinating snapshot of the stupidity of the global solar market. As it is with all good news reports, the first paragraph says it all:

BEIJING—Solar-panel makers in China are open to raising prices and limiting exports to the European Union as a way to avoid steep trade tariffs, industry representatives said Thursday.

Allow me to put this in perspective. European consumers want solar panels. Indeed, they are forced to want them, due to Soviet-style green energy production quotas enacted by the EU. That’s the context: Europeans wanting/having to buy this product.

Against this backdrop, manufacturers in China are OFFERING to raise prices. They aren’t colluding to make more money; rather, they are voluntarily raising prices against their better judgment. Why? Because EU officials are threatening to raise prices by slapping tariffs on imports of Chinese solar panels (which, again, are products that Europeans want to buy).

Keep in mind as well that the EU’s threatened tariff would co-exist with national-level subsidies, known as “feed in tariffs,” designed to suppress the price of solar panels. This is true in Germany and Spain, off the top of my head, and likely true in other countries.

So there’s an EU policy that forces Europeans to buy solar panels. Yet there is also an EU policy meant to make solar panels much more expensive. Finally, there are several European policies meant to make them much cheaper. Got that?

Such are the endless and inefficient complexities wrought when government creates an industry out of whole cloth, as any member of the Gosplan could have told you.

Post image for Winning Voter Support Makes Politicians Sound Normal on Energy Policy

E&E EnergyWire (subscription required) last week reported that Virginia Democratic Gubernatorial candidate Terry McAuliffe has endorsed federal legislation that would open offshore Virginia to oil and gas drilling. This is a major shift from his failed 2009 campaign, during which he opposed offshore drilling. On energy policy, McAuliffe also has done a U-turn on coal. In 2009, he pledged to never allow a coal fired power plant; now, he doesn’t mention coal-fired power, but his campaign does support increased coal exports.

McAuliffe’s abrupt shift in energy policy mirrors President Barack Obama’s performance during debates with GOP candidate Mitt Romney in late 2012. During his first term, President Obama’s administration imposed a suite of policies meant to inhibit hydrocarbon energy production in the United States. Yet during the debate, when the American public was paying attention, the President championed his supposed support for more oil and gas drilling, and even claimed to be a booster of the coal industry.

Post image for ‘Unleash the Energy Export Revolution’ – Mark Mills

Today in National Review Online, Mark Mills has a terrific column titled “Unleash the Energy Export Revolution.” He begins by calling out the irrationality of our government’s current anti-energy export policy: 

On May 17, the Department of Energy (DOE) approved just the second license in America to export natural gas. Nineteen more applicants still wait. Yes, private businesses, willing to spend tens of billions of private capital, are lined up for a schoolyard game of “Mother May I” to get permission to export a product that the U.S. is uniquely good at manufacturing. So good, in fact, that America is now the world’s No. 1 producer, with no end in sight. What a world. 

Or, as comedian Yakov Smirnov might say, “What a country!”

Mills makes several salient points. [click to continue…]

Post image for Stranger than Fiction: Ethical Abomination “Richard Windsor” Wins EPA Award for Ethics

Over at National Review, Eliana Johnson has an excellent post about my colleague Chris Horner’s latest FOIA find. Evidently, EPA Administrator Lisa Jackson took her Congressional-mandated transparency training using her false identity, “Richard Windsor.”And Mr. Windsor did well, because she was rewarded with three certificates attesting to her being a “scholar of ethical behavior.”

Documents released by the agency in response to a Freedom of Information Act request reveal that, for three years, the EPA certified Windsor as a “scholar of ethical behavior.”

The agency also documented the nonexistent Windsor’s completion of training courses in the management of e-mail records, cyber-security awareness, and what appears to be a counter-terror initiative that urges federal employees to report suspicious activity.

The EPA made the certifications public in response to a FOIA request from Chris Horner, a senior fellow at the Competitive Enterprise Institute who was tipped off to Jackson’s use of the Windsor account by agency employees while he was researching his 2012 book, The Liberal War on Transparency. Horner says that the EPA probably issued agency-wide training requirements for anybody who wished to maintain an active e-mail address, “never contemplating a false identity or fake employee would be created.”

So…EPA’s bloated bureaucracy thought that Lisa Jackson’s alias, the existence of which is a violation of transparency ethics, was a real person, and the agency awarded him/her a citation for ethics. Ladies and gentleman, your taxes at work!

This strange juxtaposition (i.e., Lisa Jackson ostensibly demonstrating her ethical behavior in the act of committing a gross ethical violation) immediately brought to mind the end of Billy Madison, when Billy’s nemesis, Eric, had a meltdown over “business ethics.” [click to continue…]

Post image for John Christy: Climate Change Overview in Six Slides

Yesterday, Rep. David McKinley (R-W.Va.) hosted a climate change conference in a technology park in Fairmont, W.Va.

A mixed panel of warmistas and skeptics featured Marc Marano of Climate Depot, Scott Denning of Colorado State University, Jim Hurrell of the National Center for Atmospheric Research, Joe Casola of the Center for Climate and Energy Solutions, Annie Petsonk of Environmental Defense Fund, Myron Ebell of the Competitive Enterprise Institute, Dennis Avery of the Hudson Institute, and John Christy of the University of Alabama in Huntsville, who participated by satellite link.

I emailed Dr. Christy and asked for permission to post his presentation on GlobalWarming.Org; he promptly sent me the files.

Dr. Christy’s Power Point presentation is available here. The accompanying text is available here. The main takeaway points:

  • Popular scare stories that weather extremes — hurricanes, tornadoes, droughts, floods — are getting worse are not based on fact.
  • In the U.S., high temperature records are not becoming more numerous.
  • Climate models significantly overestimated warming during the past 15 years.
  • Even if climate models were correct, a 50% reduction in U.S. CO2 emissions by 2050 would avert only 0.07°C of warming by 2100.
  • If a policy is not economically sustainable, it’s not politically sustainable.
  • The climate change impact of enhancing CO2 concentrations has so far been small compared to the public health and biospheric benefits provided by affordable, carbon-based energy.
Post image for Solar Panel Concerns Fuel Worries about Reliability

By Anthony Ward, CEI Research Associate

Solar industry executives are worried about the reliability of their own products. In an article this week, the New York Times reports industry executives are becoming increasingly concerned about the rising number of solar panel failures. The average expected operational lifetime of a solar panel is 25 years, but some are failing in only two years. Increasingly, it seems that solar panels are becoming defunct earlier than anticipated.

According to the article:

The solar panels covering a vast warehouse roof in the sun-soaked Inland Empire region east of Los Angeles were only two years into their expected 25-year life span when they began to fail. Coatings that protect the panels disintegrated while other defects caused two fires that took the system offline for two years, costing hundreds of thousands of dollars in lost revenues.

It was not an isolated incident. Worldwide, testing labs, developers, financiers and insurers are reporting similar problems and say the $77 billion solar industry is facing a quality crisis just as solar panels are on the verge of widespread adoption.

No one is sure how pervasive the problem is. There are no industry wide figures about defective solar panels. And when defects are discovered, confidentiality agreements often keep the manufacturer’s identity secret, making accountability in the industry all the more difficult.

But at stake are billions of dollars that have financed solar installations, from desert power plants to suburban rooftops, on the premise that solar panels will more than pay for themselves over a quarter century.

Subsidies and the associated pressures to reduce costs, boost sales, and reduce government debt are the principal cause of the decline in quality:

After incurring billions of dollars in debt to accelerate production that has sent solar panel prices plunging since 2009, Chinese solar companies are under extreme pressure to cut costs. [click to continue…]

Post image for Electric Vehicles: Is a “Better Place” Now in a Better Place?

Three factors limit the market penetration of electric vehicles. One is purchase price. For example, the average price paid for a gasoline-powered 2013 Ford Focus ranges from $16,500 to $24,176. In contrast, the average price paid for a 2013 Ford Focus Electric is $39,020.

Another drawback is range. Except for the Tesla Model S, with an EPA-estimated range of 265 miles, most battery-electric vehicles (BEVs) have EPA-estimated ranges of 62 to 99.8 miles — although motorists may go farther under actual driving conditions, Edmunds.Com reports. These range limitations diminish the utility and, thus, value of BEVs for many consumers, and may induce “range anxiety” — fear of being stranded between where you are and where you have to go. The Tesla Model S has an impressive range but, with a manufacturer’s recommended sale price of $69,900, most households cannot afford to buy one even with generous federal and state tax rebates.

A third and related barrier to consumer acceptance is recharging time. Of a dozen BEVs tested by Edmunds.Com, some recharged in ‘as little as’ 4 hours (2013 Fiat 500e, Ford Focus Electric, Honda Fit EV). But for some, the recharging time was as long as 5 hours (Tesla Model S), 6 hours (Volkswagon E-Golf), and 7 hours (Chevrolet Spark EV, Mitsubishi i MiEv). Buying a BEV means paying for the inconvenience of not being able to gas up and go in 5 minutes at the nearest service station the way ordinary folks do.

To overcome these battery-related inconveniences, an Israeli company called “Better Place” developed networks of battery-charging and -swapping stations in Israel and Denmark. Better Place hoped the stations would spark consumer interest in electric vehicles and spread globally. But on Sunday the firm announced “that it is shutting down, less than six years after unveiling an ambitious plan that promised to revolutionize the auto industry by reducing the world’s dependency on oil,” reports the Detroit Free Press. [click to continue…]