Bucyrus So what is the advantage of being energy independent?
So what is the advantage of being energy independent?
Don't need to maintain a strategic petroleum reserve.
Don't need to have as big navy to protect as many shipping lanes for crude.
Don't need to pay as much attention to oil producing regions outside the western hemisphere.
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
D.Carleton oltmannd Did you miss the part about how you can make liquid fuels from natural gas? Gotta include natural gas in the equation. Here's just one way: http://www.carbonsciences.com/applications.html Making liquid fuels from natural gas is not as simple as flipping a switch at the refinery. The gas-to-liquid proposal is a variant of the Fischer-Tropsch process (I think I spelled that right). This is the same process used to for coal-to-liquid. The last time Fischer-Tropsch was discussed with any seriousness was about five years ago when oil prices passed the $100/barrel mark. Then the hydro-fracking fields began to come on line and that was the end of that. Fischer-Tropsch requires billions (that's "billions" with a "b") of investment and extreme market conditions. For coal-to-liquid the cost of natural oil has to remain high for years to justify the investment. For gas-to-liquid the cost of natural gas has to remain depressed for years for the same justification. Neither I nor any of my former co-workers (energy) expect gas to stay cheap forever let alone for the rest of the decade. No one with half-a-brain is willing to take this bet. (There have been a couple of small scale prototype plants built to prove the theory... with tax dollars, of course.) We currently have a glut of cheap natural gas due to over-exploration a few years ago. This glut will eventually work itself down and the gas love affair will fade. This has a lot of us wringing our hands. Here in the Sunshine State 60% of our electrical generation is now from natural gas. You can spend billions on Fischer-Tropsch plants or billions on natural gas distribution infrastructure and new vehicle fleets. Either way, you're going to pay.
oltmannd Did you miss the part about how you can make liquid fuels from natural gas? Gotta include natural gas in the equation. Here's just one way: http://www.carbonsciences.com/applications.html
Did you miss the part about how you can make liquid fuels from natural gas? Gotta include natural gas in the equation.
Here's just one way: http://www.carbonsciences.com/applications.html
Fischer-Tropsch requires billions (that's "billions" with a "b") of investment and extreme market conditions. For coal-to-liquid the cost of natural oil has to remain high for years to justify the investment. For gas-to-liquid the cost of natural gas has to remain depressed for years for the same justification. Neither I nor any of my former co-workers (energy) expect gas to stay cheap forever let alone for the rest of the decade. No one with half-a-brain is willing to take this bet. (There have been a couple of small scale prototype plants built to prove the theory... with tax dollars, of course.)
We currently have a glut of cheap natural gas due to over-exploration a few years ago. This glut will eventually work itself down and the gas love affair will fade. This has a lot of us wringing our hands. Here in the Sunshine State 60% of our electrical generation is now from natural gas.
You can spend billions on Fischer-Tropsch plants or billions on natural gas distribution infrastructure and new vehicle fleets. Either way, you're going to pay.
Sure, as we are now paying for exploration in the Baakan field, and to make the existing fuel refineries more flexible (as has been going on for decades) and for infrastructure to get Marcelus gas to market and to convert coal fired steam plant to natural gas.
It's how capitalism works. The profits pay for the investment. Sure, it will cost billions. But, as long as the value in the marketplace is greater, it will happen.
Being able to play favorites in the Middle Eastern conflict, with impunity, AFAIK.
oltmannd Bucyrus So what is the advantage of being energy independent? Don't need to maintain a strategic petroleum reserve. Don't need to have as big navy to protect as many shipping lanes for crude. Don't need to pay as much attention to oil producing regions outside the western hemisphere.
Why would we not still need a strategic petroleum reserve if were were energy independent?
What's the advantage? It means you stop financing a lot of people who want you dead.
John Timm
If we were energy-independent, would we allow consumption of foreign oil if that oil was cheaper than our independent domestic oil?
oltmannd Sure, as we are now paying for exploration in the Baakan field, and to make the existing fuel refineries more flexible (as has been going on for decades) and for infrastructure to get Marcelus gas to market and to convert coal fired steam plant to natural gas. It's how capitalism works. The profits pay for the investment. Sure, it will cost billions. But, as long as the value in the marketplace is greater, it will happen.
That's the beauty of oil production. Domestic demand is at best stagnant. International demand is growing. Ergo investors have no hangups investing in domestic oil production since it can be sold domestically or internationally.
Natural gas, for all intents and purposes, is a domestic-only commodity; that is, the extra-continental transfer of natural gas is problematic but not impossible (read expensive). In other words, if one builds a gas-to-liquid plant and the price of domestic natural gas returns to historic norms then there is not an alternate off-shore source for your primary input. Translation: don't go there.
As for our electrical generation balance, currently the percentage from natural gas is about one-third, coal - one-third and the rest a combination of nuclear, hydro, etc. This is a pretty good balance not over-reliant on one source. The best scenario would be to increase nuclear to one-third. The inconsistent generation sources (solar, wind, etc.) would allow for fossil generation to ramp up or down when they are available without compromising the grid.
Editor Emeritus, This Week at Amtrak
Bucyrus oltmannd Bucyrus So what is the advantage of being energy independent? Don't need to maintain a strategic petroleum reserve. Don't need to have as big navy to protect as many shipping lanes for crude. Don't need to pay as much attention to oil producing regions outside the western hemisphere. Why would we not still need a strategic petroleum reserve if were were energy independent?
It goes back to the reason we put it there in the first place.
It was put in place to tide us over if imported oil were cut off. Think Straits of Hormuz.... If we produce enough internally or get it from a more secure partner (i.e. Canada) then we don't need the stockpile. Q.E.D.
D.CarletonAh, profit. That's the rub. The profit margin for energy was, is and probably will always be very low. Energy companies make their money on volume. Domestically this is a problem since all sectors of energy are off their peaks of a few years ago and some continue to trend down. No investor with half-a-brain will invest in a commodity that's demand is stagnant or in decline.
It's a global commodity with a rising demand. So the global price will drive domestic investment. If I can get it out of the ground in ND cheaper than I can get it from the North Sea, because demand from India and China are driving demand up, I most certainly will invest! And, if I can make synthetic gasoline (or stock to blend) from natural gas for less than the global price for oil & refining, I'd invest there, too.
I wouldn't count natural gas out as a motor fuel quite yet, either. It'll start out being for commuter, local trips and then expand when there is enough fleet in place. You can already get home "filling stations" from you local gas company and a purpose built Honda Civic HF to go with it. Familes may have two cars, one for local and one for long trips - sort of like they have a minivan and an a small sedan now.
oltmannd Bucyrus oltmannd Bucyrus So what is the advantage of being energy independent? Don't need to maintain a strategic petroleum reserve. Don't need to have as big navy to protect as many shipping lanes for crude. Don't need to pay as much attention to oil producing regions outside the western hemisphere. Why would we not still need a strategic petroleum reserve if were were energy independent? It goes back to the reason we put it there in the first place. It was put in place to tide us over if imported oil were cut off. Think Straits of Hormuz.... If we produce enough internally or get it from a more secure partner (i.e. Canada) then we don't need the stockpile. Q.E.D.
I can see the logic that the strategic reserve would make up for a sudden foreign supply cutoff. But I thought another reason for the extra reserve was to supply a sudden demand spike caused by the need to fight a war. Wouldn't we still need the strategic reserve for that reason?
We have been led to believe not being reliant on foreign oil is ideal; that being independent, pumping oil from soil between the Atlantic and Pacific Oceans in the Northern Hemispheres is the panacea to our energy--oil and petroleum-- problems. But as has been revealed lately our own patriotic oil companies is more concerned about where the can get the best price rather than serving their country. That is they will sell it anyplace and everyplace who bids it up above what we will pay until we pay more. Keystone Pipelne products are to be refined and sent off shore; Balken oil is brought to the Atlantic shores' refineries to be near the ports to send the product to Europe. The oil and energy companies are lying to us, holding us as fools and hostage to their bottom lines. They want--and get--huge subsidies, tax breaks, etc. from our governments to send the finished products overseas and not supply American with all the energy it needs forever, and forever more. So, we will never be independent of overseas oil because our American Patriotic oil and gas companies don't want it and won't let it happen.
RIDEWITHMEHENRY is the name for our almost monthly day of riding trains and transit in either the NYCity or Philadelphia areas including all commuter lines, Amtrak, subways, light rail and trolleys, bus and ferries when warranted. No fees, just let us know you want to join the ride and pay your fares. Ask to be on our email list or find us on FB as RIDEWITHMEHENRY (all caps) to get descriptions of each outing.
Henry,
If the oil companies agreed to supply 100% of U.S. demand, would you let them set the U.S. price to the price of the highest world market bidder?
henry6We have been led to believe not being reliant on foreign oil is ideal
I don't want to cast an aspersion. However, having read your whole post I find it hard to believe that you fell of this load of you know what. I sure never did. Whatever happened to "Millions for defense but not one cent for tribute?"
John
It is as plain as the noses on your faces...oil companies will sell American crude and refined products out from under us to anybody in the world either raising our consumer costs or shorting our markets....they don't give a *** for anything more than lining their own pockets. I see them working this shale gas fracking and they lie, cheat, deceive and use all kinds of deceptive practices to get their way. I have no faith in them, I have no respect for them. Nor can I respect or have faith in the politicians who take huge sums of lobby and other monies from them.
Bucyrus If we were energy-independent, would we allow consumption of foreign oil if that oil was cheaper than our independent domestic oil?
The price of crude oil we pay in the US is reflective of the world oil price with adjustments for grade and transport costs. We will become petroleum independent when we can produce more oil at the world price than we consume. Some new production will come from new technologies in conventional fields, like the Bakken. But I think they are mostly counting on non-conventional sources like the Canadian Tar Sands which rely on crude being at a high price. Also, old marginal oil wells are shut-in or plugged when the cost of production exceeds the price of that oil. When the price of oil goes up these wells are re-opened or sometimes even redrilled.
Do you remember, or have you read of, the disruptions caused by the Arab Oil Embargo/Yom Kippur War of 1973 or the Iranian Revolution in 1979?
I lived through those as a young adult...no repeats, please.
The less we depend on our energy supply coming from charming places like Iran, Iraq, Saudi Arabia, Algeria, Russia, Nigeria, and Venezuela, the better off we are.
henry6It is as plain as the noses on your faces...oil companies will sell American crude and refined products out from under us to anybody in the world either raising our consumer costs or shorting our markets....
I don't understand what you mean by "sell the oil out from under us." That suggests that you believe that the U.S. has some kind of entitlement to the oil at less than the market price.
You seem to have a lot of hostility toward the oil companies. If you were king, what would you do to fix the problem?
garyla Bucyrus So what is the advantage of being energy independent?The less we depend on our energy supply coming from charming places like Iran, Iraq, Saudi Arabia, Algeria, Russia, Nigeria, and Venezuela, the better off we are.
Yes, I agree that that is an advantage. I am just not sure how we become energy independent in a world of rising market demand. The goal sounds good, but how do we make it happen? What I am hearing is that we should imprison the U.S. oil companies for cheating and lying; and start our own nationalized oil company to service only the U.S.
That way, we could not only assure self-sufficiency, but we could also make oil products affordable.
BucyrusWhat I am hearing is that we should imprison the U.S. oil companies for cheating and lying; and start our own nationalized oil company to service only the U.S.
Where do you hear that? On Radio "Tin Hat" or some crazy blog?
C&NW, CA&E, MILW, CGW and IC fan
Bucyrus...I am saying that we can have all the oil and gas in the world right here in River City and the oil and gas companies would tell us it is ours, it will make us petroleum independent, make us feel good about our selves, elect petroleum company shills to government, then sell the stuff overseas causing a drought in our supply here, then blame it on welfare or some other group, and charge us more anyway.
In other words: DON'T TRUST THE PETROLEUM COMPANIES, either what they say, what they say they are going to do, or how good you'll make out at their hands...
Bucyrus I don't understand what you mean by "sell the oil out from under us." That suggests that you believe that the U.S. has some kind of entitlement to the oil at less than the market price.
If I might offer a suggestion. Perhaps Henry has, as a lot of us have, been conditioned by our government and the media to externalize the blame for the rising cost of motor fuels onto foreign greed whicha has generally followed the line of 'don't blame the oil companies, blame the evil robber barons of OPEC'.
I know I've been thusly conditioned. When you hear that long enough, I think it's natural to hope that under a different framework of control, things (the price of oil, in this example) would be "better".
Perhaps unrealistic, but I think it's only natual to hope that by domesticating the supply, these past evils are somehow mitigated. And the local markets suddnly reflect lower prices.
Of course it won't. Just as we are seeing, theoil companies will start exporting oil to get the highest possible price, and could car less if Joe American finally starts seeing lower prices at the pump
Bucyrus Henry, If the oil companies agreed to supply 100% of U.S. demand, would you let them set the U.S. price to the price of the highest world market bidder?
How about if the USA becomes a major supplier on the Global market, we join OPEC, and turn it into another "Trilateral commission-like" puppet gallery?
Yes, by all means lets have the government run a nationalized oil company as efficiently as it runs anything else. That will clearly solve whatever "evils" exist.
I have no problem with the world market. But a lot of what drives the idea of self-suffiency is the belief that the price is too high because somebody else controls the supply. And so, if we could make our own supply, we could lower the price to what is fair. This, of course, is nonsense. The oil sells to the highest bidder in the world market.
So if we created our only U.S. dedicated supply at a fair price, it would have to be isolated for its own exclusive market. This would require passing laws that prohibit U.S. oil companies from selling to the non-U.S. consumers at a higher price.
The one thing that adding domestic supply will do is lower the price on the world market, but that does not seem to be the focus of the U.S. engery independence movement.
The world market will only pay so much for refined petroleum, it is no different than here in the US. At some point foreign governments cannot subsidize the purchase of Gasoline, Diesel, Propane and LNG. China is in the best position to do this at the moment, but their needs could become so large that even they could not hold internal prices down, and then their demand will drop. The biggest customer for US Diesel fuel is Europe, the biggest customers for US Gasoline are Venezuela , Argentina, and then Brazil. The price that US refineries can produce, transport, and then sell Diesel in Europe is putting the least efficient European refineries out of business.
I wonder if the US taxpayer will get suckered into underwriting major infrastructure to make it less costly for the oil companies to export North American oil to the more lucrative global consumers?
It is very clear: we are manipulated by the the oil companies who also manipulate our governers who manipulate us, and we are now and forever will be, at their combined mercies unless we all start walking and burning wood for heat and light. Is there a way out? Home wind and solar units, GEO Thermal...our energy companies have not as yet, I don't believe, gotten their hands on them. The rest of the world is there, doing just that. But our energy companies are telling us their oil and gas are the only answers. Think and look outside the box...the box being the U.S.
henry6Is there a way out? Home wind and solar units, GEO Thermal...our energy companies have not as yet, I don't believe, gotten their hands on them. The rest of the world is there, doing just that. But our energy companies are telling us their oil and gas are the only answers.
So if home wind and solar units are the answer, go for it. What is holding you back? You have got choices. What's the problem?
We are talking "us" not "me". I'm just commenting on "them".
Okay, what is holding us back?
Our community is FREE to join. To participate you must either login or register for an account.