Marcellus Shale Update – 3.01.2018

The curious inconsistency among our national energy policy, national security policy and national environmental policy is coming into sharper focus.  It likely will be amplified by events thousands of miles away in the Middle East.

Start locally.  Last month I wrote about the astounding fact that people in New York and New England are more comfortable paying the Russians to import gas thousands of miles over ships of questionable seaworthiness than they are building pipelines to secure a cheap, reliable energy supply and pay Americans.  This aversion to pipelines is not unique to New York and New England – witness Dakota Access in North Dakota, Keystone in Nebraska and Jordan Cove in Oregon.   In Lambertville, NJ (next to Trenton), Mayor Dave Del Vecchio signed off on new zoning restrictions aimed at stopping the Penn East Pipeline which would transport gas from Northeastern Pennsylvania to the Trenton area.  Other municipalities have expressed their intent to try to stop the project.  Despite the fact that Penn East has received FERC approval, in the post-Andrew Cuomo/Constitution world interstate pipelines construction is a free-for-all.  How that serves the national interest is anyone’s guess.

Now broaden the horizons internationally, and especially to the Middle East.  The papers are full of stories about an impending war between Israel, Iran and Hezbollah.  Having been “invited” into the Syrian situation, Iran has used the opportunity to build its own military bases and extend its “Ring of Fire” around Israel.  They may be close to accomplishing it.  The Israelis are more and more convinced that war will break out soon.  They will not let Iran and Hezbollah build missile factories right under their nose.  Add to this the military power Russia has established in Syria, and for good measure take a small dose of American-backed Syrian rebels, Kurds and Turks, and you have a giant mess.  With Iran constantly pushing for a military confrontation, it’s hard to see how one will be avoided.  Once underway, there is no margin for error, and war is an exceedingly messy and imprecise business.

Already Americans have directly killed Russians.  On February 7 Russian forces attacked the town of Deir al-Zor in Syria, held by American-led Kurdish and Arab forces. At least 100 and potentially many times more Russians were killed and wounded in American air strikes.  The Russians have kept this hush hush, but it shows the danger.

Meanwhile, Syrian President Bashar Assad is carpet bombing anti-government rebels using chlorine gas in the Syrian region of Eastern Ghouta.  Western diplomats like British Foreign Secretary Boris Johnson are demanding a response, but any must take into account Russian air defenses.

With rather clear cut human rights violations, and with Russia directly involved, it would seem that Europe would love to give Russia a black eye over the Eastern Ghouta outrage, at least diplomatically.  The problem remains European dependence on Russian oil and gas.   Russia is Europe’s main supplier.   As of 2015, the 28 EU Member States imported 902 Mtoe of energy from Russia.  If a conflagration happens, and if we end up directly involved with the Russians – each of which is very possible – don’t expect overwhelming European support in areas like sanctions against the Russians.  Thanks to our pipeline buildout confusion and delays in establishing export terminals, we may face the prospect that the only way to project American power is to put American young men and women in harm’s way.  This is not a pleasant prospect. And didn’t have to happen.  It is, however, a direct response to our failure to counteract a Russian energy stranglehold despite having the opportunity to do so.

In any war situation, the price of commodities, including oil and gas, is likely to skyrocket.  Thanks to shale gas, that price spike will be tempered, at least everywhere in the Country except New York and New England.  We are on our way to overtaking Russia as the world’s largest oil producer, but we have no way to get the oil and natural gas to the Northeast.  Thanks to Andrew Cuomo and the other New England Governors and politicians, their region remains remarkably exposed.

As one nation, can we simply cut a geographic region loose during a price spike and say there will be no help coming from the rest of the country and no imports permitted from Russia and Yemen due to the international situation?  This could devastate New England economically.  On the other hand, does the whole country have to suffer for the well-meaning yet naïve environmental extremism of that region?  Let’s hope we don’t find out, but it’s more and more likely we will.

Questions? Let Dan know.

Marcellus Shale Update – 2.15.2018

It’s a few years too late, but the foolishness of absolutism under the guise of environmentalism finally is becoming too much to ignore.  Just two weeks after I railed against New England importing natural gas from Russia, the ultra-liberal Boston Globe joined in.  On Tuesday, in a remarkable 2,000 word editorial, the Globe finally said what needed to be said about the anti-pipeline movement.

Where I disagree with the Globe is in its portrayal of Massachusetts Senator Ed Markey as a fighter against these gas shipments.  Markey may have demanded the Federal Government stop the importing of gas that was drilled in Russia, but Markey has done nothing to alleviate the problem New England is causing itself by its environmental policies.  If anything, he’s done the opposite.  It is curious that while Markey demands Federal action to stop these Russian gas shipments, he remains mute over the usurpation of Federal control over our interstate gas pipelines by ideological state regulators under the pretense of protecting clean streams.

Environmental absolutist self-righteousness isn’t limited to New England, of course.  I saw it firsthand at the Delaware River Basin Commission hearings in Philadelphia three weeks ago.  The West Coast is full of it.  California has sued the Trump Administration over 25 times about rules related to hydraulic fracturing.  Churches, mosques and synagogues in Oregon have environmental committees seeking to prevent more oil and natural gas pipelines in that State.  Oregonians don’t seem to question the wisdom of having their gas and oil brought in by rail over the environmentally sensitive Columbia River Gorge.  In June 2016, 16 oil tank cars derailed from a Union Pacific train, igniting an explosion, spilling 42,000 gallons and forcing an evacuation of the town of Mosier.

Then there’s New York.  Usurping federal power over interstate pipelines granted to the Federal Energy Regulatory Commission by using a loophole in the Clean Streams Law, Governor Andrew Cuomo has blocked the building of any pipeline from the Marcellus Shale region of Northeastern Pennsylvania into New England.  Even if New Englanders wanted to stop paying off Vladimir Putin, they couldn’t until Governor Cuomo approves.  I take no position on the entire Trump/Russia collusion spectacle, but it is ironic that the people actually putting American dollars into Mr. Putin’s pocket are the politicians of New York and New England.

By any rational evaluation, the shale revolution and the pipeline buildout have been a net positive for the environment, the economy and our national security.   No matter how ineptly the energy industry makes its case, that use of natural gas has decreased our carbon emissions to levels not seen since the late 1980’s (more than offsetting any increase in methane emissions), given hope and money to people in rural communities that were on the verge of bankruptcy, allowed individuals with only a GED to get good jobs that actually can support their families and made our country functionally energy independent for the first time in my lifetime.

Rationality often is lost in this debate, however, to be replaced by ideology and extremism.  As with most absolutisms, that has the opposite of its intended effect.  How else do you explain the goings-on in Boston?  What Northeast politician would run on a platform that he/she would encourage drilling for natural gas in the Arctic with lax or no environmental safeguards, transporting that gas in ships of unknown safety through sensitive habitats, charging New Englanders for that gas eight times the amount paid by Pennsylvanians for their gas and sending much of that money to Vladimir Putin’s cronies?  It’s all happening now – right before our eyes.

This is not to say that regulation of these pipelines shouldn’t be robust and vigorous – it should, and this is not to say that there isn’t a place for national environmental policy to interact with national energy policy – it must.  It is to say, however, that these issues need to be examined from a practical, not ideological, perspective.  There is nothing noble about drilling into the ground for gas and oil or in building pipelines.  They all have downsides.  But so does everything else.

Let’s keep looking for ways to develop, store and transmit renewable energy, including spending large sums of tax dollars on research and development, but let’s not use the hope of a truly renewable, environmentally-neutral power supply to prevent us from doing the things now to clean our environment and protect our children’s future.  To do otherwise would be national negligence.

Questions? Let Dan know.

Marcellus Shale Update – 1.30.2018

Please excuse the rapid fire emails this week, but the circumstances are so extraordinary they need to be stated:

Ten years after the start of the shale revolution, the United States reached the height of absurdity.  A tanker named the Gaselys docked in Boston Harbor this weekend carrying natural gas.  New England needs this gas because it refuses to allow the buildout of our interstate natural gas pipeline system.  The Gaselys carried liquefied natural gas from – Russia.

You read that correctly.  Despite being just a few hours away from the most prolific natural gas fields in the world in Northeastern Pennsylvania, New England needs to obtain natural gas shipped on the high seas from gas wells in Russia.

Absolutely everything about this picture is wrong.  The gas could have been produced in Pennsylvania under American environmental regulations overseen by the Pennsylvania Department of Environmental Protection.  Instead it was produced in the Arctic eco-system overseen by the Russians.

The gas could have been transported a few hundred miles along newly built gas pipelines that are extraordinarily safe (though not 100%, nothing is).  Instead, the gas was shipped thousands of miles over the ocean in tankers of unknown quality and safety.

New England residents could have developed a secure, domestic supply of natural gas at affordable prices.  Instead, New England has a completely unreliable supply of natural gas at possibly the highest prices in the world.  It is astounding that any business would even consider locating in New England.   Boston made the cut of the final 20 cities competing for Amazon’s new headquarters.  How Amazon seriously could consider setting up operations there is beyond me.

Finally, the money used to purchase the gas could have gone to American companies who employ American workers and pay royalties to American landowners.  Instead, the money went to – Vladimir Putin.  And it’s not a one-time thing.  There will be other Russian gas shipments to Boston in the upcoming weeks.

The reason for all of this, of course, is that the shortsighted politicians in New York and New England refuse to allow construction of the pipelines needed to move the gas from the Marcellus Region to New England.  These politicians claim they are preserving the environment and combatting climate change.  They are doing the opposite.

Most of the power plants in New England can use either oil or natural gas.  Usually the price of natural gas makes it the preferred fuel.  With the price spikes affecting New England this winter, those plants have switched to oil, a much dirtier burning fuel.

In addition, New England politicians and “environmentalists” applauded as  New England’s nuclear power plants shut down.  The Pilgrim Nuclear Plant in Massachusetts is the only one left.  It will close by June 2019.  No one knows how that power supply (about 4.1% of Massachusetts’s total) will be made up.  In 2014, Vermonters cheered when the Yankee Nuclear Plant closed.  “Enviros” assured everyone that the balance would be offset from cleaner renewables.  No such luck.  After years of decline, New England’s CO2 emissions rose 5%.

There is no delicate way to put this.  The actions of the “environmental community” relating to natural gas are making our world, and our children’s world, less safe, less secure and less environmentally friendly.

If these “environmentalists” have an honest plan to power America’s needs, please show it to us.  Do we really need to import Russian gas before they present us with a real plan to run our nation in 2018?  How about even by 2038?  Anyone who loves the environment knows there are trade-offs.  Which ones would our “environmentalists” make?

I know these posts are read in the United States Senate, so I will ask the Senators who receive them to forward this to Massachusetts Senators Warren and Markey with one question.  What are you trying to accomplish?

Energy is not a play toy.  We’re not in a university classroom where you can pontificate with no real world consequences.  This IS the real world.

Your constituents’ money is going to Russia.  Your CO2 emissions are rising.  Your oceans and bays are filling with gas tankers.  Your state and region are becoming less competitive.  As American dollars flow into Vladimir Putin’s pockets, please help us understand what you are doing.

Questions? Let Dan know.