If the energy is produced here then the federal government will get additional revenues in the form of taxes and royalties.
Not true. There are all sorts of local prices for oil. For example, WTI versus Brent. I don’t see what point you’re trying to make with this statement though.
Actually, I think we’re looking at a glut of natural gas supplies that will result in continued low prices over the next decade.
Because we do. Where do you think all of innovations in shale gas production in the world are coming from? It’s all practically modelled off what George Mitchell did in the Barnett Shale.
First, natural gas supplies won’t be exhausted any time soon. Reserves continue to grow as new technological advances are made. Second, what do you mean by advances in “methods of usage”? I would think that all sources of energy can equally benefit from advances in methods of usage.
I’m glad you’re here to share your perspective LonghornDave.
Meh. 1% times 50 years times millions of wells is a lot of poison underground. And you’re breaking things that aren’t even understood- who knows what wealth is being destroyed!
To be fair, no I did not realize that the practice extended back 50 years. My impression was that it is something that is being utilized more and more as ‘easy’ gas deposits are depleted. Maybe we’re both right?
But let’s sort out what we agree on- there is in fact a lot of natural gas on our bit of this continent. How much exactly? Shitloads. I don’t have a specific figure, but it’ll be the equivalent of a zillion btus, really.
Still, I don’t like it as a motor fuel. That’s the hatin’est thing I’ll say about natural gas. Electric motors are 90%+ efficient at converting energy into momentum. ICE engines, whatever the fuel, are about 20% efficient. If you want to get off foreign oil, drastically reduce demand- via ev’s. And the greens love it.
I’m not beyond all compromise though. Show me a Volt-like ev which uses an ICE generator motor burning CNG and I’ll shut up about it. Show me a turbine (which burns pretty much anything) generator, and I’ll put CNG into it as long as it stays cheap, then switch to Hempanol ™.
The only confusion is (maybe) yours. Reducing foreign oil imports could not be more relevant to the op!
The problem is framed as a disturbing ratio of debt to GDP. People are starting to freak out because we cannot pay off such huge debts.
But! There is still the other half of the equation. Develop a cutting-edge industry in renewable energy and not only do we eventually meet all of our domestic energy needs, but we can also export an awesome set of products to the rest of the world. GDP explodes- and not from a bubble- and the problem falls off the radar. Everybody except G.W. Bush is happy. Proceed with UHC. Perfect
Maybe we can use the exploding national debt as an opportunity to persuade all the haters of the beauty and wisdom of breast feeding, natural hemp products and menstrual cups. Perfect.
Can’t agree with you here, technically even a huge rise in GDP (and thus a drop in the debt GDP ratio) doesn’t reduce the deficit. It can if government expenditures become lower than the new tax revenues, but that is not a given.
More importantly the confusion wmfellows is talking about is that issues that are related to the trade deficit (problem 1) are intermingled with issues of government spending vesus government revenues, ie the national debt (Problem 2). These are two different problems the US is facing. At this point in time the government is spending way more than they are receiving (not saying they are wrong to do so, but the fact is it is happening); and in the last decades the US as a whole (not only government, but also consumers and businesses) have been consuming more than they are producing, ie exports are larger than imports. The trade deficit is actually one of the things that has improved during the crises with the strong drop in US consumption, but still things could become problematic if thing return to ‘normal’ when the US economy bounces back. Of course all these things are intermingled and connected with each other, but it is important to get the differences straight.
What energy is concerned, it is not the government that buys foreign oil, but US businesses. This is why it is seen mostly as influencing the trade deficit and not the national debt. It is actually more likely that government stimulations of renewable energy sources will increase the national debt (at least in the short term) because this stimulus will need to be payed for.
I would bet on 3 because it has happened before. Large deficits and a rising debt were a serious problem in the 80’s and early 90’s. It was solved without huge difficulty by a combination of somewhat higher taxes and spending restraint. It’s not hard to see how you could have a similar combination in the near future. The Bush tax cuts for the wealthy could be repealed. Emissions trading or a carbon tax could raise a substantial chunk of revenue in the long run. Regardless of what happens to the current health proposals, measures to “bend the curve” on health costs are likely to be passed some time in the next decade. In the meantime while debt/GDP ratios are likely to get into a somewhat uncomfortable zone they are still quite far from the panic zone.
We have become a nation of predatory borrowers, borrowing from our children. Even the current generation of new workers is comfortable borrowing from their children. They have no clue what it means to be fiscally responsible.
The psychology around borrowing has changed. We have figured out that we can even blame irresponsible incompetent borrowing on those who lent us the money–the “predatory lenders.”
We do not tax wealth; we tax income. Those who do not understand the difference–and that’s the great majority–are precisely the reason wealth will never get taxed. Increasing government involvement in healthcare only increases the spend; we are no more likely to restrict our healthcare to what we can afford than we have restricted any other thing we want. Carbon trade taxes are the modern equivalent of indulgences. They will never raise any more money than they cost in lost production and should/when the AGW hoopla is replaced by the next Big Thing they will wither away anyway.
There may be no reason to panic but there is absolute certainty this system will fail. It is clearly unsustainable. If we are unwilling to undergo enough pain and cutbacks to solve the current crisis we will not change our minds when even more pain is on the table.
I think it is around 2 quintillion btus by current estimates.
I’m fairly ignorant when it comes to power and transmission of electricity and things like that. Perhaps you could educate me on this. You’re talking about the efficiency of a compressed natural gas vehicle versus an electric vehicle. Isn’t this really an apples to oranges comparison. I mean, sure an electric vehicle may be more efficient, but isn’t the transmission of electricity fairly inefficient?
I’m not sure if I am being clear in my question. Much of electicity generation is natural gas produced. Is it more efficient to power a car by natural gas directly, or by converting natural gas to electricity and then powering the car by electricity? Don’t you lose a significant amount of energy in the conversion and transmission to electricity?
I’m not an expert either, there are people around here who could educate you on this better than I. Here are the factors we’re looking at:
-Efficiency of ev motors
-efficiency of CNG motors (assumed to be equivalent to a gas motor)
-efficiency of electricity transmission
I’ll try to come back with some cites. I’m sure I’m right about the relative efficiency of the motors. I don’t have any info on transmission efficiency, but as I understand it this would improve markedly with a grid supporting/supported by thousands or hundreds of thousands of ev batteries. Less energy is wasted as it has somewhere to ‘go’, and production can be cut back at peaks as drawing power from existing batteries smooths out the curve if that makes sense.
I’m sure it is more efficient to power an ev with natural-gas generated electricity. Most of the lost energy in an ICE is through heat- cars have a radiator to blow it all off. It isn’t a problem when you’re creating steam- most of that heat is actually used. You get a huge efficiency bump generating electricity vs. momentum from natural gas.
I’ll try to come back with some specifics if someone doesn’t beat me to it.
That’s fair criticism. My hope is that a big increase in GDP will not only reduce the debt ratio, but improve revenues enough that the budget could be in the black. Maybe that really is a ridiculous idea- the government seems to want to outspend revenues no matter how big the pie, huh?
All the same, this country is going to have to start turning a surplus. A big increase in GDP seems like a good start. I can’t think of what would achieve that more than global leadership in energy independence products.
But that won’t work by itself, I’m sure you’re right. I’m still listening. What else do we need to do?
I think there might be one more consideration – the (in-car) conversion of electric power to mechanical.
There was a relatively recent thread (within the past 3-4 months) that discussed hybrid vs. EV efficiency; IIRC, a pure battery powered car takes quite a hit compared to a gas-powered hybrid, which I would expect would also hold true for a NG powered car.
I did a cursory search for the thread, but came up with bupkis. Since you might have better luck than I…IIRC, DSeid, xtisme, and/or Sam Stone were involved.
Yes, and primary energy production is not a basis for sustainable real economic growth in and of itself, and not a significant contributor to Treasury coffers relative to the larger economy, as the various examples of both developing and developed country primary producers indicate.
In comparison, the Renewables sector involves quite a bit of frontier technology which may reasonably be expected to have spill over into side applications, and drive a wider base of related economic activity on an escalating growth basis than the fairly mature hydrocarbons industry.
Additionally, Governments essentially tax the value added, and transformation / processing is where much of that is, rather than primary production. As such, given I believe the US actually does most of own processing, the Gov’t revenues are not likely to massive shift.
There we get into seeing potentially significant gains in potential revenues to the Treasury.
Mind you, I am not entirely sold on the hypothesis re Renewables actually realising the potential - so do not take this as an argument that this WILL happen, merely it contrasts the logic of the potentials.
No False. Or simply confused.
Yes, there are “local” prices for various grades of oil, relative to the specific content / type. There is, however, a global general price (with discounting or premiums based on quality). Unless you are arguing WTI and Brent somehow are utterly unrelated to each other in overall petrol pricing… (yes we can allow for imperfect substitutability due to costs of refinery switch over / retool for grades, etc)
Barring export and/or price controls, the price of eminently tradeable goods is set by global demand. Of course export and price controls invariably lead to massive distortions which reduce growth and thus the revenues to government.
I very much doubt that. Projecting current situation forward a decade is foolish. Given pressures on oil, one is likely to see demand escalating for Nat Gas for the very reasons you are looking at it.
Insofar as I am looking at global markets, unless you have a substantive cite, I will take this as American provincialism. A lead there may be, Huge or Massive as you put it (relative to other advanced producers) strikes me as nationalistic boastfulness.
Nat Gas reserves will one day be exhausted, it is not a “renewable” - that is the focus of the observation. This sort of near term curve thinking is very much what has led to over-reliance on petrol. Yes, there are significant Nat Gas reserves, but not infinite.
But leaving that aside, methods of use, I was referring to ability to boost energy extraction from each unit of gas burned. That is, efficiency of turbines, although perhaps as well other efficiencies in the overall process. Relative to Alt. Energies, and in particular, Renewables, I believe it not particularly controversial to state that hydrocarbon engine (gas or petrol, etc) technology is quite mature, and while doubtless there are efficiencies to be achieved, they are without question less than the increases in efficiency (lower cost per unit of energy produced) that may be reasonably expected from hydrocarbons such as Nat Gas.
Of course, Nat Gas and Renewables are not either or choices. Nat Gas is certainly far more infrastructure ready to replace petrol.
Afraid not. You are confusing imports with budget deficit. They are not the same problem.
An assertion.
There is no economic evidence that the US can not service its current and near-term (5 yr say) debt load.
It may become uncomfortable, depending on growth paths, but given the example of other developed countries, European and Asian, the US is not at forced default levels.
Renewables will not meet “all” of your domestic energy needs in any currently realistic time frame.
While I find the hypothesis that Renewables (in combination with investment in overall energy efficiency, both retail and industrial) may be able to provide a real boost to GDP growth to be colourable, and worth investing in, the idea your GDP would “explode” on this basis is absurd. And I would observe new technologies always lead to bubbles (for the very reason illustrated in your wide eyed enthusiasm and unrealism above). You might generate a Renewables bubble. Part of the game in the end.
Insofar as other countries, including China, are investing heavily in renewables research, it is rather unlikely the US would end up in a sort of 1950s Part II scenario of massive exports.
Of course I do not think that various crude oil prices are “utterly unrelated to each other”. In fact I never said anything of the type. To claim so is a complete strawman. I actually believe they are highly correlated to each other.
Now without putting words in your mouth, your general argument seems to be that prices are dependant upon quality of the crude. While I don’t disagree that certainly gravity and sweetness make a huge difference, there is clearly more to it than that. In fact, I believe that history shows the markets have a degree of independence. There is certainly no global price that can simply be adjusted for by quality to come up with a local price.
Here’s my evidence for that statement. Please review the historical pricing for WTI and Brent on the EIA website. If you were to chart the data for since May 20, 1987 you would find that WTI trades at a average premium of $1.44 to Brent. Further the average ratio of WTI to Brent is 1.06:1. This would make sense since WTI has a higher API gravity and is also slightly sweeter than Brent. However, Brent has traded at a $0.48 premium over WTI in 2009 with a WTI to Brent ratio of 0.99:1. Further, WTI has traded as high as a $22.18 premium and as low as a $13.20 discount to Brent. The WTI to Brent ratio has varied from 1.29:1 to 0.72:1.
Explain why there is this variation if there is a global price for crude with only variations due to quality? Why is there even a market for commodity basis swaps if your belief is true?
The only thing that any of us really has to go by is the futures market. Based upon NYMEX pricing, here are the forecasted increases in natural gas prices over through 2021.
2010 to 2011: 16.26%
2011 to 2012: 2.91%
2012 to 2013: 1.24%
2013 to 2014: 1.79%
2014 to 2015: 2.13%
2015 to 2016: 1.93%
2016 to 2017: 2.06%
2017 to 2018: 2.00%
2018 to 2019: 1.92%
2019 to 2020: 1.87%
2020 to 2021: 1.84%
So, basically you have a large projected increase in the first year (to only a modest price of $6.69/mmbtu) which would likely be attributed to coming out of the recession and then very small projected increases thereafter. It’s anyone’s guess what ends up being true.
Who is saying natural gas reserves are infinite? Who the hell plans for the infinite. Further, what the hell is near term to you? Again, based on current technology, the U.S. has more than 2 quintiliion BTUs of natural gas. That will last us far beyond the “near-term”. Based on current natural gas usage (as measured by the EIA over the past 12 months) and the current reserves in just the United States (based on current technology which continues to improve) the U.S. has enough natural gas to last us 92 years. Is that really near-term to you? Further, in case you think this is some sort of static number, realize that based on new technologies, this number rose by 24 years from 2006 to 2008. That’s with plays like the Marcellus and Haynesville in their infancy and probably without even counting plays like the Eagleford.
