Home > Frac > Energy Sanity Group

Energy Sanity Group

March 19, 2012

In his recent Op-Ed in the Huffington Post entitled Time to Pass the Natural Gas Bill, Daniel Dicker wrote

The industry also indicated universally that they are willing to submit to any transparency request that environmentalists or Washington suggest in order to continue the U.S. shale revolution.

The industry is on board, it’s time for the people to get on board, too. Let’s call this grassroots effort the “energy independence coalition.” Or, how about the “energy sanity group.” That’s the only way to describe what we’re doing — or actually not doing — with our plentiful national resource of natural gas. We’re flaring — actually burning off natural gas instead of using it to get at more expensive oil resources in the Bakken and elsewhere. That’s not sane — it’s just nuts.

 I couldn’t agree more. As Dicker noted, gasoline prices are hovering near $4 per gallon while the equivalent cost of a “gallon” on Natural Gas would cost $1.60. Taking the national average into account at $3.83 per gallon and an undefined rise in gasoline prices predicted for the summer, considering a cleaner burning, cheaper fuel source should and will be in the minds of the average consumer. If we calculate this out in round numbers, each fill-up will cost a citizen with a twenty gallon tank $76.60. Filling up with Natural Gas would cost that same citizen $32.oo; meaning that the everyday American would spend less than half the price of one tank of gasoline for two full tanks of Natural Gas or a savings of $44.60 per trip to the pump. That is more savings than the cost of visiting a Natural Gas fueling station. If this plays out further, and we consider that the average person fills up three times per month, that is a savings of $133.80 per month or $1605.60 per year.
We could all use an additional $1605.60 in our account every year. This, more than anything else, will speak to Americans struggling in a recession and it is what the industry, who currently produces the oil and gasoline, has no problem supporting.
As Dicker said,
Natural gas is greener than oil, plentiful, domestic and cheap. As gas prices today rose over $3.83 as a national average, the equivalent cost of a “gallon” of natural gas is $1.60. Most analysts expect domestic prices for natural gas to stay relatively low for years, perhaps decades to come, while oil price is at the whim of every Middle East conflict, emerging market competition for resources and decreasing global production.

The oil and gas industry is ready for this. Last week’s CERA conference — the yearly global energy get-together of all the majors — could have easily been renamed the natural gas conference. Apache CEO Steve Farris claimed that U.S. supply of natural gas isn’t the claimed 100 years, it is more like 200 years.

Shell CEO Peter Voser spoke about investment in a new U.S. gas-to-liquids plant and the prospects of LNG exports. At one point, moderator and energy guru Daniel Yergin interrupted Voser to ask sarcastically: “You still produce oil too, don’t you?” The industry also indicated universally that they are willing to submit to any transparency request that environmentalists or Washington suggest in order to continue the U.S. shale revolution.

Realizing the savings in using our own resources is not a stretch. If shipping costs go down, particularly for those diesel operated trucks that move most of our goods nationwide, the savings will undoubtedly be passed along to those who purchase those goods. Diesel prices have soared over $4.oo per gallon and those massive trucker tanks cost hundreds of dollars to fill. With the most common setup for a big rig being twin 100 gallon tanks, it costs a cool $800 to fill up once. If they ran on Natural Gas, they would cost $320.00 per fill. That’s a savings of almost $500 per tank(s).
With the amount of Natural Gas we have, we can count on those prices staying low. When the cost to do business goes down, costs go down all around. So why are we, by doing nothing in the way of action on Natural Gas, continuing to import Oil and Gas that costs us so dearly? And it does, cost us dearly. With over 62 million cars on the road, that costs consumers, consumers, an additional $99,547,200,000 per year. I got this figure by multiplying the average savings at $1605.60 by 62 million. This doesn’t account for the 2oo gallon fill ups by Big Rigs; I used an average 20 gallon fill up for 62 million vehicles.
In summary, we burn nearly $100 billion in fuel costs, stay dependent on the Middle East for our cost stability, pass that cost instability along to the consumers, burn something three times dirtier than Natural Gas, waste our Natural Resource because of the glut, and leave our star energy player on the bench. Does that make sense? Certainly not.
While politicians play games in Washington, the US looks bent on foregoing a huge economical boost whose ramifications are currently incalculable because we won’t use this resource.  It is what we are doing by not doing. Why?
I think what we should do is look more closely at what we are doing by not using the Shale Gas as we aught because there isn’t a single figure that shows me why what we are currently doing is better. It isn’t better; it is nuts.
Spend more on fuel, pass that cost to the people. Burn a dirtier fuel, pass that impact to the globe. Leave shale on the bench, send more money to the Middle East instead of keeping it here at home. Stifle growth of the industry, stifle job creation and an increasing tax base.
This is what we are doing by not doing. I agree with Mr. Daniel Dicker. We need an Energy Sanity group. What are doing now is a Titanic Navigation strategy. Let’s avoid the Ice Berg. We can all see the thing.
Advertisements
Categories: Frac
%d bloggers like this: