The shale gas revolution: We have not yet begun to boom

posted at 8:01 pm on July 10, 2013 by Erika Johnsen

As I’ve now argued many times over, the Obama administration is extravagantly fond of citing statistics about how our oil imports are way down while our domestic oil production is way up, with the implicit suggestion being that their policies somehow deserve the credit for these phenomena. See, they really are about an “all of the above” energy strategy and you can’t say that they’re anti-oil or anti-fossil fuel, because America is currently experiencing an economic and employment boom via domestic oil and gas production!

In fact, however, much of the credit for the current oil-and-gas boom and our decreased reliance on foreign sources belongs to production on state and private lands, and the Obama administration still has plenty of policies in place actively restricting permitting to the federal lands and waters to which plenty of companies would really like more access. Yes, we’re experiencing an oil-and-gas economic boom, but many of the Obama administration’s policies are coming at the direct opportunity cost of an even bigger boom.

It’s a similar story with natural gas and the many companies who are awaiting on pending applications to export the stuff in its liquified version. Companies are only freely allowed to sell and ship liquified natural gas to countries with whom the United States already has special, specific free trade agreements; but obviously, and as with any industry or economic sector, natural-gas companies would very much like to be allowed expand the market and reap the subsequent economic benefits.

Certain Democrats in Congress — who happen to have various manufacturing and environmental interests, with their own very definite stake in the domestic price of natural gas, vociferously egging them on — have been holding up the show with the patently ridiculous and wildly inconsistent claim that free trade somehow might not be in the “national interest.” Dumb.

The Obama administration, however, has at last been showing some small signs that they might finally be ready to start letting up on the LNG-export front. I missed it last week, but Energy Secretary Moniz again attested that the administration is going to get moving soon:

U.S. Energy Secretary Ernest Moniz said his department will conduct a “fair amount of action” in evaluating applications for natural gas exports amid concerns within the industry over delays.

“I’m planning to go through them as rapidly as I can,” Moniz said, according to Reuters.

Companies looking to ship liquefied natural gas abroad must first apply to the Department of Energy for a permit. These U.S. firms have voiced frustration over lengthy delays and changes to the department’s rules.

About two weeks ago, ExxonMobil (XOM) Chief Executive Rex Tillerson criticized delays in approving more natural gas export projects, saying U.S. companies are losing millions of dollars a day and the nation is losing ground to other countries.

“It’s a very competitive marketplace. It’s not like people are just going to stand at our door like panting dogs just waiting for us to give this (LNG) to them,” Tillerson said.

Unfortunately, however, it sounds like they’ll be doing so at a pretty pathetic pace. DOE officials are saying that they can only approve permits at a pace of one permit every couple of months, which means that companies at the back of this queue (via Real Clear Energy) will be waiting until 2015 at least.

 photo Screenshot2013-07-10at52941PM_zps4c91d382.png

The queue at the Department of Energy for permits to export natural gas to the energy-starved manufacturing nations of Asia is long and not showing any signs of moving. Listed here are the 26 applications that have been put before the Department of Energy. Of them only two permits – Chenier’s Sabine Pass facility in Louisiana and Freeport’s facility in Texas – have been permitted. Meanwhile rival producers such as Qatar, Australia and Indonesia are rapidly signing long-term contracts with Japan, Korea and China. By the time the Department of Energy gets around to acting, there may not be much of a market left.

Natural gas is a cleaner-burning and increasingly popular and economical fuel, and this is all making for one very unnecessary federal case. The determined greenies, of course, doth protest.


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…and then…there’s JugEars!

KOOLAID2 on July 10, 2013 at 8:04 PM

U.S. Energy Secretary Ernest Moniz said his department will conduct a “fair amount of action” in evaluating applications for natural gas exports amid concerns within the industry over delays

…so…they’ll slow walk as much as they can!

KOOLAID2 on July 10, 2013 at 8:05 PM

…and then…there’s JugEars!

KOOLAID2 on July 10, 2013 at 8:04 PM

you ruined a good dream..

:)

Electrongod on July 10, 2013 at 8:06 PM

The shale gas revolution: We have not yet begun to boom

I think this stuff is really cool. There must be a mind-boggling amount of natural gas in the earth’s crust.

Now, if the scientists could just agree on how it got there it would be even more fascinating…biological or extraterrestrial origin,,,or both I’m thinking.

Dr. ZhivBlago on July 10, 2013 at 8:06 PM

The Obama administration, however, has at last been showing some small signs that they might finally be ready to start letting up on the LNG-export front. I missed it last week, but Energy Secretary Moniz again attested that the administration is going to get moving soon

…yep!…and the Keystone Pipeline is under construction!

KOOLAID2 on July 10, 2013 at 8:07 PM

And the Obama administration is working overtime to come up with regulations to kill it.

clippermiami on July 10, 2013 at 8:08 PM

Boom won’t start until Obama is gone.

redguy on July 10, 2013 at 8:12 PM

And Obama has not begun to put the boot on the neck.

InkyBinkyBarleyBoo on July 10, 2013 at 8:14 PM

Obama should go boom.

InkyBinkyBarleyBoo on July 10, 2013 at 8:15 PM

O is slow as molasses, but that’s how he wants to be.

The Great Destroyer!!

Scrumpy on July 10, 2013 at 8:21 PM

Pipe dreams folks, hs gon’ kill it all…

Scrumpy on July 10, 2013 at 8:22 PM

Please stop going after such energy, wouldn’t we rather live as the Cro-Magnon did, at one with nature?

Sure it would mean living in parasite-infested peat huts, eating grubs and meal worms, and dying of simple broken bones or strep throat, but our corpses would return to Mother Gaia in peace to replenish her for the next reduced generation.

Bishop on July 10, 2013 at 8:22 PM

Seriously, take a look at a map that shows just how much land the Federal Government owns in mineral/fossil fule rich states.

Huge.

BLM…Gah.

BigWyo on July 10, 2013 at 8:24 PM

Imagine all the government money that was pumped into solar and wind was used for natural gas infrastructure and a policy that supported it.

Imagine…

CTSherman on July 10, 2013 at 8:30 PM

So let’s start by running our over the highway trucks on Natural gas!!
Would that lower the trade deficit too much, would the world price of oil be impacted — we hope so!

Then maybe we can run some cars on it. People could have natural gas pumps (compressors) in their homes and just fill up at home (kind of like an electric car). (OOPs fewer service stations are needed.) Catalytic converters, large lithium batteries are no longer a recycling issue.

KenInIL on July 10, 2013 at 8:31 PM

Boom won’t start until Obama is gone.

redguy on July 10, 2013 at 8:12 PM

Exactly.
A farmer in PA makes about $300,000 a month from what they pump out of his ground.
Barry gets in. Everything grinds to a halt.

vityas on July 10, 2013 at 8:33 PM

KenInIL on July 10, 2013 at 8:31 PM

That makes too much sense.

CTSherman on July 10, 2013 at 8:34 PM

Unfortunately, however, it sounds like they’ll be doing so at a pretty pathetic pace. DOE officials are saying that they can only approve permits at a pace of one permit every couple of months, which means that companies at the back of this queue (via Real Clear Energy) will be waiting until 2015 at least.

C’mon, Erika… Get real…

They can slow-walk this stuff well into Hillary’s campaign and even past Election Day… ask Lois Lerner.

PointnClick on July 10, 2013 at 8:37 PM

the administration is going to get moving soon

Really?

Seeing is believing. Especially with this administration of serial liars.

GarandFan on July 10, 2013 at 8:42 PM

dbd

abobo on July 10, 2013 at 8:45 PM

vityas on July 10, 2013 at 8:33 PM

It’s not just the farmers that are doing well.

I’m not in the O&G business nor the hotel business but I’ve been working on and off over the past few years in Pennsylvania, mostly along the I-80 corridor all the way from Scranton-Wilkes Barre to Grove City and mostly north of I-80. It’s amazing how busy things have gotten out this way. Try getting a hotel room at last minute any where along there.

If New York would get off their asses, they would be in on it too, much more than they already are. Many of the O&G workers stay in NY when working along the Southern Tier because of the shortage in Pennsylvania.

http://www.post-gazette.com/stories/business/news/pittsburgh-area-hotels-find-niche-in-oil-gas-workers-694646/

CTSherman on July 10, 2013 at 8:52 PM

If New York would get off their asses, they would be in on it too, much more than they already are. Many of the O&G workers stay in NY when working along the Southern Tier because of the shortage in Pennsylvania.

Of course. But when you have Smucky Schumer as a human roadblock to everything, you can’t expect growth. (You can expected increased handgun regs tho)

vityas on July 10, 2013 at 8:58 PM

Another point of delay will surface soon in that the infrastructure at our ports for gas lading is that the facilities are pointing in the import direction instead of the export direction. 180′s take a couple years to safely be retrofitted.

ericdijon on July 10, 2013 at 9:01 PM

ericdijon on July 10, 2013 at 9:01 PM

More than retrofitted, entire liquifaction trains have to be built to receive gas under pressure and cool it into a liquid. This takes construction of cold boxes, and several 30+ megawatt gas turbine driven compressors per train.

Surprising because it would be a nice chunk of change for mostly GE built gas turbines and compressors.

BTW, driling for natural gas has all but ceased where the fields produce dry gas (close to 100% methane) due the price to drill for the price at the wellhead is cash negative at the present low prices.

Kermit on July 10, 2013 at 10:54 PM

Obama’s brain is LNG.

Or at least the L part.

Sherman1864 on July 11, 2013 at 12:22 AM

It’s working out anyway. The Feds are supporting the price with their slow-walking of permits.

What they are keeping locked up is just money in the bank. It will be produced at a beter price level for the drillers, operators etc.

Unfortunately, the Feds will probably find a way to raise the taxes, so it will be a wash at best.

Meremortal on July 11, 2013 at 3:10 AM

One reason for the delay is Obama is checking on the political ideology of the gas companies and who they contributed to before deciding who gets a permit…..

devan95 on July 11, 2013 at 8:13 AM

Democrats will take credit for the shale gas revolution they tried to stop for a century.

Remember how Clinton has been taking credit for the Republican’s balanced budget he demonized and tried to Veto?

Remember how Clinton has been taking credit for the Republican’s welfare reform he demonized and tried to Veto and Obama discarded?

DANEgerus on July 11, 2013 at 9:01 AM

Why are we trying to export natural gas (which costs energy to compress and refrigerate it to liquify it) and importing crude oil?

Because Lisa Jackson and the EPA put stringent regulations on power plants producing 75,000 tons/year of carbon dioxide, which would be produced by natural gas having a heating value of 39 megawatts (MW). Most commercial gas turbines used for electricity generation produce about 250 MW, so that new gas-fired power plants can’t get permits (neither can coal-fired plants).

If the market was allowed to operate freely without interference from He Who Stops the Seas from Rising, the plentiful supply of natural gas would favor the construction of gas-fired power plants (which also burns cleaner than coal) and cheaper electricity.

Also, the development of natural-gas-powered trucks and buses could reduce the consumption of diesel fuel, and thereby reduce America’s need for oil imports.

Steve Z on July 11, 2013 at 10:03 AM