How fracking has helped the US lead on climate
By Katie Brown, Ph.D. , 12/11/15, TheHill.com/CongressBlog
As representatives from around the world work to finalize an agreement in the last few days at the Paris COP21 climate conference, it’s important to acknowledge the fact that hydraulic fracturing and the increased use of natural gas has done more to reduce greenhouse gas emissions than any other government scheme or agreement.
Without adopting stringent policies such as the Kyoto treaty or cap-and-trade, the United States, the largest economy in the world, has the distinction of being the only country in the world to significantly reduce its greenhouse gas emissions. That’s why, in his address to world leaders at COP21, President Obama was able to tout that the “advances we’ve made have helped drive our economic output to all-time highs, and drive our carbon pollution to its lowest levels in nearly two decades.”
The evidence of shale gas’ enormous role in reducing emissions is all around us. In fact, the world’s most prominent climate scientists, the U.N. Intergovernmental Panel on Climate Change has credited the fracking boom and U.S. natural gas for the great progress that’s been made on climate change:
“A key development since AR4 is the rapid deployment of hydraulic fracturing and horizontal-drilling technologies, which has increased and diversified the gas supply and allowed for a more extensive switching of power and heat production from coal to gas (IEA, 2012b); this is an important reason for a reduction of GHG emissions in the United States.” (emphasis added)
According to the Energy Information Administration (EIA), since 2005, natural gas has prevented more than one billion metric tons of carbon dioxide from being emitted from power plants in the United States. Meanwhile, by comparison, the use of renewable energy has prevented only 600 million metric tons of carbon dioxide. EIA also noted as natural gas fired electricity generation ramped up, power plant greenhouse gas emissions reached a 27-year low in April 2015.
If that’s not enough, the Paris-based International Energy Agency’s (IEA) latest World Energy Outlook pointed out that natural gas is a “valuable component of a gradually decarbonizing electricity and energy system.” IEA previously hailed the “decline in energy-related CO2 emissions in the United States” as “one of the bright spots in the global picture” and went on to note, “One of the key reasons has been the increased availability of natural gas, linked to the shale gas revolution.”
Finally, The Breakthrough Institute (BTI) – an environmental group founded by individuals whom Time Magazine recognized as “heroes of the environment” – released a report in 2013 that demonstrated that natural gas has prevented 17 times more carbon dioxide emissions than wind, solar, and geothermal combined.
The science has been echoed by Obama, as well as his top regulators and administration officials, all of whom have touted the environmental benefits of natural gas. Environmental Protection Agency (EPA) Administrator Gina McCarthy said recently, “Responsible development of natural gas is an important part of our work to curb climate change and support a robust clean energy market at home.” Energy Secretary Ernest Moniz noted that natural gas bas “been a big contributor to our carbon reduction.” Obama has pointed out that natural gas “not only can provide safe, cheap power, it can also help reduce our carbon emissions.”
Sen. Tim Kaine (D-Va.) put it well when he explained, “We’ve been improving our emissions in this county without agreeing to the Kyoto accords, without Congressional action because of innovation form the natural gas area.”
Despite the overwhelming scientific consensus that natural gas has played a huge role in reducing emissions, anti-fracking groups, such as Food & Water Watch, the Sierra Club the Natural Resources Defense Council, Greenpeace, among others – who claim climate change poses the “largest environmental threat ever known by humankind” – continue to deny the science.
While they insist the IPCC is “gold standard” for climate science, they refuse to acknowledge what these scientists have determined about natural gas’ climate benefits. They have also launched a campaign that involves denying the science of the EPA’s five year comprehensive study, which found “no widespread, systemic impacts” to groundwater resources. For these groups, the facts and the science take a back seat to their overall ideology of eliminating all fossil fuels – an ideology that even former White House advisor John Podesta has called “completely impractical.”
As the Paris talks come to a close it’s important to remember that if the United States truly wants to make an impact it should move away from activists’ “completely impractical” solutions and instead take heed of the real – and very positive – environmental impacts of natural gas.
Brown is a spokesperson for Energy In Depth, a research and education program of the Independent Petroleum Association of America (IPAA).
Moves by OPEC ministers weigh on Oklahoma oil patch
By: The Oklahoman Editorial Board, 12/14/15, NewsOK.com
ABOUT 6,500 miles lie between the town of Laverne in northwestern Oklahoma and the city of Lagos in southwestern Nigeria. But these places have something in common. They're enduring the economic fallout from low crude oil prices.
And no official in either Laverne or Lagos can do much about it.
Nigeria is a member of OPEC, the cartel that seems determined to inflict damage on — if not starve — the North American energy boom. Recently, OPEC ministers decided to continue oil production at the high, extant levels, thereby keeping crude prices low.
The reaction to the price slump in Laverne: “I don't know that we have an answer,” Mayor Susan Davis says.
The reaction to the price slump in Nigeria: “There will be pain,” the country's OPEC minister says.
The Oklahoman's Bradon Long recently chronicled the pain being experienced in northwestern Oklahoma. Pumping service owner Dwight Freeman said his business is off by more than 60 percent in the past year. Layoffs in the region are common. Jobs are a lot tougher to come by, Davis said.
If you think the suffering is confined to the oil and gas sector alone, think again. The spinoff effects of the slump are profound, hitting eateries, housing, retail and general services. But the effects stretch across the globe, to wherever oil is found and produced.
Yet in oil-rich Saudi Arabia, it's just another bump in the dunes. Lowering production would eventually push crude prices higher, but the OPEC nations decided collectively to keep the pumps pumping.
This means continuation of a present output that's 1.5 million barrels a day above the official ceiling of 30 million barrels.
But wait, there's more: Iran plans to step up its production to recover some of the lost volume experienced during its years in the diplomacy wilderness.
The country once produced around 4 million barrels a day but has been running at about half that. Iran has plans to restore full production after its nuclear-related sanctions are relaxed in a few months. So chalk up another hollow victory for the Obama administration, which would prefer that the world consume less oil.
OPEC is an outfit consisting of haves and have-nots. Its poorer members would have benefited from a drop in production and a subsequent price uptick. The Saudis couldn't care less.
Of course, North American producers — not being part of any cartel (despite arguments to the contrary from the anti-fossil fuel crowd) — don't have an official production limitation policy. They've been limiting production (and exploration activities) out of necessity, according to market principles.
Small towns in the oil patch such as Laverne are at the mercy of OPEC ministers far, far away. Yes, this reality is somewhat balanced by the prosperity the region experiences when oil prices are high and business is booming.
Therein lies a lesson that we all need to remember: Oil is a commodity traded in free markets for whatever price it will bring, based on demand and economic conditions. This is true now and it's equally true when the oil patch is booming.
Never forget that the North American shale boom lessened U.S. dependence on oil from volatile regions. But also don't forget that the most powerful players in these regions are still calling the shots, leaving Laverne and nearby towns to wait and wonder if the good times will ever roll again.
History shows that such good times will return. Meanwhile in northwestern Oklahoma, home sales are plunging, unemployment is rising and the corner cafes have empty chairs and empty tables.
Which puts Laverne on common ground with a place that's some 6,500 miles away.
Oil Skids Toward 11-Year Low As IEA Warns of Worse Glut
By: Barani Krishnan, Friday, December 11, 2015, Reuters.com
NEW YORK, Dec 11 (Reuters) - Oil prices extended their freefall on Friday, flirting with 11-year lows, after the International Energy Agency (IEA) warned that global oversupply of crude could worsen next year.
Brent and U.S. crude's West Texas Intermediate (WTI) futures fell as much as 5 percent on the day and 12 percent on the week as mild pre-winter weather and a plummeting U.S. stock market added to the toll on oil prices.
Oil traders and analysts alike have been perplexed by oil's decline since the Dec. 4 meeting of the Organization of the Petroleum Exporting Countries which all but abandoned price support for crude by removing OPEC's production ceiling in an oversupplied market.
"It's very tough to find a cause to get bullish here," said Peter Donovan, broker at Liquidity Energy in New York.
"The bearish IEA report has put further selling pressure on an already soft market. The back months have actually been hit a bit harder than the fronts as the report dispelled thoughts that a price recovery was on the not-too-distant horizon."
Brent's front month slipped below $38 a barrel for the first time since December 2008, settling down $1.80, or 4.5 percent, at $37.93.
2004 Low Beckons
Brent's session low was $37.36 - barely a dollar above the $36.20 hit during the financial crisis. If Brent falls below that level in the coming week, that will be its lowest since mid-2004, when it traded at around $34 a barrel.
WTI's front-month settled in the $35 territory the first time since February 2009. The contract finished the session down $1.14, or 3 percent, at $35.62, after hitting an intraday low at $35.35. WTI's financial crisis low was $32.40 in December 2008.
A year ago, Brent and U.S. crude were trading at around $60 a barrel, and during early summer 2014, above $100. Now, WTI contracts through 2024 are under $60.
Friday's only positive news was data showing U.S. drillers have reduced the number of oil rigs operating in the country for a 14th week out of 15, reaching the smallest number since April 2010. The market pared some losses on that.
The IEA, which advises developed nations on energy, warned that demand growth was starting to slow.
"Consumption is likely to have peaked in the third quarter and demand growth is expected to slow to a still-healthy 1.2 million bpd (barrels per day) in 2016, as support from sharply falling oil prices begins to fade," the energy watchdog said in its monthly oil report.
Crude prices have fallen with little restraint since OPEC abandoned its output ceiling of 30 million bpd. Led by No. 1 crude exporter Saudi Arabia and other big Middle East oil producers such as Iran and Iraq, the group pumped 31.7 million bpd in November. That was more oil than in any month pumped by OPEC since late 2008.
"Brent crude's renewed slide below $40 per barrel was the damning verdict on OPEC's failure to agree on a number even for what is largely a notional output target," London-based Capital Economics said in a note.
Banks such as Goldman Sachs have said oil could fall to $20 if the world runs out of capacity to store unwanted supply.
"The WTI and Brent markets are trending at this point with no real interest from anyone to buy," said Scott Shelton, broker and commodities specialist at ICAP in Durham, North Carolina.
"The forecast remains incredibly warm for the U.S. That's a large drag on demand and means less demand for distillates and more for export, which drags down the rest of the world as well."
U.S. weather forecasts call for warmer-than-normal temperatures through Christmas that would curb heating demand.
Gasoline's premium to heating oil widened as the heating oil contract slumped 6 percent to near 7-year lows while gasoline settled flat.