All-of-the-Above Energy Strategy Favors Natural Gas

Ken Silverstein | Sep 08, 2012

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Everyone can agree on the central premise of President Obama’s address to his party’s national convention -- that the nation now has two fundamentally different visions of what path the country should take. And, surprisingly, when it comes to energy, the two political parties seem to also agree on the potential of shale gas.

Supporting such unconventional natural gas is the path of least of resistance. But for Obama, the risk is that this energy position will alienate elements of his party who disagree vehemently that shale gas is a “silver bullet” and who protest its production methods -- called fracking -- because of their alleged effects on ground water. Still, the rationale for giving the fuel source a major endorsement is centered on two facts: It is abundant in nature and it is cleaner than coal.

The acceptance speech, nonetheless, extended an olive branch to the coal industry that has declared its goal the turning back of the regulatory clock. The president, in fact, pointed out that “clean coal” is part of the energy fabric. At the same time, he said that renewable energy is the future and that during his tenure, such fuels have doubled in size.

“We're offering a better path – a future where we keep investing in wind and solar and clean coal; where farmers and scientists harness new biofuels to power our cars and trucks; where construction workers build homes and factories that waste less energy; where we develop a hundred year supply of natural gas that's right beneath our feet. If you choose this path, we can cut our oil imports in half by 2020 and support more than 600,000 new jobs in natural gas alone,” Obama says.

To that end, the president has sought to distinguish his positions on shale gas from those of his Republican challenger. In essence, Obama will require more government oversight to ensure that the production methods are safe. Natural gas developers, however, are concerned about the federal government invading the territory of state agencies that they think are closer to these issues.

Those producers are also fearful of revealing proprietary information, or the chemicals that they are using to loosen the fuels from the rocks. With environmental and civic groups breathing down their necks, the administration wants to ensure the “public’s right to know.” Because tainted drinking water supplies or dirty water rising to the surface have become such hot-button issues, many explorers are coming around to this eventual reality.

“So the role the federal government at this point is to make sure that we are providing the research dollars and the monitoring so that we don’t see the health and safety of people in these areas put at risk, but the technology has improved greatly and the natural gas boom that we’re seeing around the country is something that I want to encourage,” Obama told WHBC Radio in Ohio, in a phone interview that its host had conducted.

Building the Base

The president is opening up more offshore areas to drilling -- a move that he had committed to make before the BP oil disaster in the Gulf of Mexico. Now that the administration has reviewed that situation and implemented new safety measures, he said that exploration can proceed -- with conditions. In other words, the federal government understands the economic contributions of the off-shore oil and gas industries but it also understands that any spills can devastate the local ecology, affecting all of the ancillary economies. 

Conciliation aside, he is continuing to emphasize that oil company profits are greater than ever and that the industry should get off of the government’s dole -- a place where it has been perched for a century. Its federal allocation could now fund innovative green technologies: “Government support is critical in helping businesses get new energy ideas off the ground,” Obama has said previously.

Oil and gas producers are disapproving, saying that the president is out to “stifle” development. They want more access to areas now off limits to development and they will continue to push for the Keystone XL pipeline that would run from Canada and into Texas. Here, they argue that Obama’s election year politics are causing the delay of what they believe to be a vital energy lifeline -- one that would create jobs while also limiting U.S. involvement with oversea’s regimes.

“We've opened millions of new acres for oil and gas exploration in the last three years, and we'll open more. But unlike my opponent, I will not let oil companies write this country's energy plan, or endanger our coastlines, or collect another $4 billion in corporate welfare from our taxpayers,” Obama told Democrats.

With the Republican and Democratic conventions finished, the candidates will now pound the pavement. Both presidential hopefuls are endorsing an inclusive energy strategy with natural gas taking top billing. Still, each man is trying to build up his base, which means that those bankrolling the victor will help write the rules.


EnergyBiz Insider has been awarded the Gold for Original Web Commentary presented by the American Society of Business Press Editors. The column is also the Winner of the 2011 Online Column category awarded by Media Industry News, MIN. Ken Silverstein has been named one of the Top Economics Journalists by Wall Street Economists.

Twitter: @Ken_Silverstein

energybizinsider@energycentral.com

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Comments

Shale Gas in U.S.

Your latest article on natural gas has been quite helpful to me in appraising current attitudes on shale gas in the United States. A corresponding discussion has begun in Germany, where domestic resources would allegedly be adequate to cover only 13 years of the country's gas needs. Investments by Exxon and others may nevertheless be expected, since natural gas is sold for four times the prices prevailing in North America. We also have the highest retail electricity prices in the world, with the exception of Denmark, Hawaii, and (due to drought) Brazil. German households currently pay 33 US cents per kWh, with additional increases of 30 percent predicted by 2020.

--
Jeffrey H. Michel MSc.
Ing.-Büro für Energieforschung / Energy Consultant
Hamburg

The above article related to gas use in energy production

Dear Sir,

I have great appreciation on your perfect work to keep people proper informed on energy matters.

To be short in this comment:

1. Any new energy production unit on Earth will be adverse to human race and environment, due to heat ejected to the atmosphere, by production, transportation and distribution lines, lightening and energy use by applications

Conclusions:

a. Energy production should be moved out of atmosphere, in space.

b. Energy should be transported and used on Earth without heat losses, on the base of other new principles, maybe not discovered yet, but if we the humans will have such target, something good will happen.

With deep respect and consideration,

Constantin Robitu