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The Business Council for Sustainable Energy, in partnership with Bloomberg New Energy, just released the 2017 Sustainable Energy in America Factbook. The report covers the across-the-board benefits for the rise in natural gas use across the United States, with the most notable benefit being the fact that American consumers are now spending less of their incomes on energy than ever before in the modern era.

The factbook found that record-low natural gas prices enabled consumers to devote “less than 4% of their total annual household spending to energy in 2016, the smallest share ever recorded by the US government,” as the following chart from the report shows,

The factbook reports that retail electricity prices fell 2.2 percent from 2015 to 2016 and consumers paid 3.9 percent lower prices than a decade ago. These lower prices have been particularly advantageous to energy intensive industries, as the report notes,

“Exceedingly low natural gas and electricity prices have helped to reduce costs for industrial players, particularly those in energy-intensive sectors. Despite a surge in the value of the dollar over 2015-16, the United States remains among the lowest cost markets for electricity in the world for industrial customers, beating out other large countries such as China, India, Mexico and Japan.”

The report also highlights the fact that low natural gas prices have allowed the U.S. economy to grow at the same time as we’ve reduced greenhouse gas emissions — a previously unheard of decoupling trend. One reason, the report notes, is because of increased natural gas use for electricity generation. In fact, natural gas is now the top fuel source for electrical generation, which has driven U.S. CO2 emissions to their lowest levels since 1991,

“Within the power sector, the progress is even more noteworthy: in 2016, greenhouse gas emissions from US power plants dropped 5.3% in just one year. Since 2005, the power sector has shrunk its carbon footprint by 24% – in other words, the US is 75% of the way to the Clean Power Plan’s “32% by 2030” headline target, with 14 additional years left to go. In large part, this decarbonization is due to market forces: the boom in domestic natural gas production has provided the sector with a cheap, cleaner burning source of fuel (a natural gas combined-cycle plant emits roughly 60% less carbon than a coal-fired unit); additionally, renewable energy costs have fallen dramatically and corporations have captured cost-savings through energy efficiency measures.”

As the following chart from the factbook shows, natural as accounted for 34 percent of U.S. electrical generation in 2016 — up from 22 percent in 2007.

Theses trends, of course, are thanks to increased natural gas production and the development of better infrastructure throughout the country. The combination has given states and consumers better access to power from a variety of sources, from natural gas to electricity.

However, the report notes that development of necessary natural gas infrastructure is not keeping pace with demand and should be a priority going forward,

“Natural gas infrastructure remains important, along all segments of the value chain.”

The Factbook reports that projects planned in Appalachia, for example, where production has exceeded the capacity of existing infrastructure, will “boost pipeline capacity by 70% through 2020, allowing producers to export more to the South, Northeast and West and eliminate inter-regional price discrepancies.”

Appalachia’s much-needed pipeline infrastructure boost is characteristic of many parts of the U.S. including in New England, where decreased coal and nuclear energy have led to higher gas consumption. The report advises, “Investment in new pipelines to bring gas into the region will be as important as Appalachian pipeline takeaway capacity.”

The 2017 Sustainable Energy in America Factbook provides further proof that there’s a lot to love about natural gas these days. In fact, considering Americans are saving more on energy bills than ever before, the economy is growing and we are the only major country that is reducing GHG emissions, what’s not to like?

Fortunately, as planned infrastructure comes online and existing infrastructure expanded or improved, the benefits will only get better.

ENERGY TRANSFER PARTNERS LP
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WILLIAMS COS INC
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28.77 USD

North America's natural gas market just had a "Jurassic Park" moment. I'm referring to that scene in the old Spielberg movie where two children are puzzled by ripples in a water cup -- which turn out to herald the thunderous approach of a T-Rex.

In the gas market's case, the ripples took the less-poetic form of a couple of pipeline projects getting approved by the Federal Energy Regulatory Commission. Both projects, the Williams Cos. Inc.'s Atlantic Sunrise and Energy Transfer's Rover, will allow natural gas produced in the Appalachian region to be 'exported' to other parts of the U.S. and Canada.

Appalachian gas is the monster.

The Marcellus and Utica shale basins -- which lie predominantly beneath West Virginia, Pennsylvania, New York and Ohio -- are enormous. 

Vapor Tigers
The Marcellus and Utica shale basins have risen from nothing to accounting for almost a third of U.S. natural gas output in less than a decade
 
Source: Energy Information Administration

The U.S. pipeline system, however, was originally built to bring gas into the Northeast's big cities from places like Texas and Canada, not the other way around. So a glut of gas has built up in Appalachia. That has left local producers having to either scale back growth, do deals to diversify out of the region, or just take a discount on their gas:

Cut Off
Pipeline constraints have led Appalachian gas to sometimes trade at huge discounts to benchmark prices
 
Source: Bloomberg
Note: Benchmark is Henry Hub spot price.

That spread is why companies such as Williams and Energy Transfer want to build new pipelines.

The FERC approvals came in a rush last week because one of its commissioners stepped down on Friday, leaving it with only two and, therefore, without a quorum. Atlantic Sunrise and Rover -- the latter with some caveats -- squeaked under the gate before it came down.

Nexus, another planned pipeline that is a joint venture between Spectra Energy Corp. and DTE Energy Co., didn't get its certificate in time. Even so, DTE said on Monday that the two companies "remain committed" to Nexus starting up toward the end of this year, pending a new FERC quorum. Given the president's fondness for both pipelines and natural gas, the administration may press Congress to appoint a new commissioner sooner rather than later.

The upshot is that, after years of bondage, Appalachia's gas producers may flip to having more pipelines than they need to take their gas away:

Even if Nexus's timetable were to slip somewhat, it's clear that within 12 to 18 months, there will be more capacity for Marcellus and Utica gas to flood into Midwestern, Southeastern and even Canadian markets.

This is an unalloyed boost for the pipeline builders as well as regional gas producers such as Cabot Oil & Gas Corp., Range Resources Corp. and Southwestern Energy Co. Cabot's stock jumped as much as 13 percent on Monday morning.

More pipelines, though, also mean more gas-on-gas competition. We've seen this already in the global gas market, where new supply from places such as Australia and the U.S. are penetrating previously locked-up markets such as Europe (there's a reason Russia finds it necessary to weigh in on the fracking debate). 

In Appalachia's case, local gas production has already been nudging rival supplies out of the region. Look at what's happened to imports of Canadian gas into the northeastern U.S. in the past few years:

Turned Back At The Border
Imports of Canadian gas into the northeastern U.S. -- Appalachian producers' prime market -- have dropped by a third since early 2012
 
Source: Energy Information Administration
Note: Imports of Canadian gas to Maine, New Hampshire, New York and Vermont. Data are for trailing 12-months to smooth out seasonal swings.

As more Appalachian gas flows out to the wider North American gas market over the next couple of years, so benchmark prices will fall.

More pipelines form part of a wider, deflationary trend of rising energy supply that is likely under President Trump (see this). That means not only gas markets, but also coal miners and even power generators will feel the effects as those ripples grow more intense.

-- "Exit Strategy" chart by Rani Molla

Scarcely a day goes by without us being warned of coastal inundation by rising seas due to global warming.

Why on earth do we attribute any heating of the oceans to carbon dioxide, when there is a far more obvious culprit, and when such a straightforward examination of the thermodynamics render it impossible.

Carbon dioxide, we are told, traps heat that has been irradiated by the oceans, and this warms the oceans and melts the polar ice caps. While this seems a plausible proposition at first glance, when one actually examines it closely a major flaw emerges.

In a nutshell, water takes a lot of energy to heat up, and air doesn’t contain much. In fact, on a volume/volume basis, the ratio of heat capacities is about 3300 to 1. This means that to heat 1 litre of water by 1˚C it would take 3300 litres of air that was 2˚C hotter, or 1 litre of air that was about 3300˚C hotter!

This shouldn’t surprise anyone. If you ran a cold bath and then tried to heat it by putting a dozen heaters in the room, does anyone believe that the water would ever get hot?

The problem gets even stickier when you consider the size of the ocean. Basically, there is too much water and not enough air.

The ocean contains a colossal 1,500,000,000,000,000,000,000 litres of water! To heat it, even by a small amount, takes a staggering amount of energy. To heat it by a mere 1˚C, for example, an astonishing 6,000,000,000,000,000,000,000,000 joules of energy are required.

Let’s put this amount of energy in perspective. If we all turned off all our appliances and went and lived in caves, and then devoted every coal, nuclear, gas, hydro, wind and solar power plant to just heating the ocean, it would take a breathtaking 32,000 years to heat the ocean by just this 1˚C!

In short, our influence on our climate, even if we really tried, is miniscule!

So it makes sense to ask the question – if the ocean were to be heated by ‘greenhouse warming’ of the atmosphere, how hot would the air have to get? If the entire ocean is heated by 1˚C, how much would the air have to be heated by to contain enough heat to do the job?

Well, unfortunately for every ton of water there is only a kilogram of air. Taking into account the relative heat capacities and absolute masses, we arrive at the astonishing figure of 4,000˚C.

That is, if we wanted to heat the entire ocean by 1˚C, and wanted to do it by heating the air above it, we’d have to heat the air to about 4,000˚C hotter than the water.

And another problem is that air sits on top of water – how would hot air heat deep into the ocean? Even if the surface warmed, the warm water would just sit on top of the cold water.

Thus, if the ocean were being heated by ‘greenhouse heating’ of the air, we would see a system with enormous thermal lag – for the ocean to be only slightly warmer, the land would have to be substantially warmer, and the air much, much warmer (to create the temperature gradient that would facilitate the transfer of heat from the air to the water).

Therefore any measurable warmth in the ocean would be accompanied by a huge and obvious anomaly in the air temperatures, and we would not have to bother looking at ocean temperatures at all.

So if the air doesn’t contain enough energy to heat the oceans or melt the ice caps, what does?

The earth is tilted on its axis, and this gives us our seasons. When the southern hemisphere is tilted towards the sun, we have more direct sunlight and more of it (longer days). When it is tilted away from the sun, we have less direct sunlight and less of it (shorter days).

The direct result of this is that in summer it is hot and in winter it is cold. In winter we run the heaters in our cars, and in summer the air conditioners. In winter the polar caps freeze over and in summer 60-70% of them melt (about ten million square kilometres). In summer the water is warmer and winter it is cooler (ask any surfer).

All of these changes are directly determined by the amount of sunlight that we get. When the clouds clear and bathe us in sunlight, we don’t take off our jumper because of ‘greenhouse heating’ of the atmosphere, but because of the direct heat caused by the sunlight on our body. The sun’s influence is direct, obvious, and instantaneous.

If the enormous influence of the sun on our climate is so obvious, then, by what act of madness do we look at a variation of a fraction of a percent in any of these variables, and not look to the sun as the cause?

Why on earth (pun intended) do we attribute any heating of the oceans to carbon dioxide, when there is a far more obvious culprit, and when such a straightforward examination of the thermodynamics render it impossible.

The much-anticipated intelligence report which concluded that Russia tried to influence the recent presidential election had another startling, yet widely ignored, conclusion: The Russian government promotes anti-fracking propaganda in the United States.

Russia accomplishes this through its "news" network, RT, which promotes the Kremlin's interests around the world. The report, issued by the Director of National Intelligence, states bluntly:

RT runs anti-fracking programming, highlighting environmental issues and the impacts on public health. This is likely reflective of the Russian Government's concern about the impact of fracking and US natural gas production on the global energy market and the potential challenges to Gazprom's profitability.

The science on fracking is pretty clear. Compared to burning coal or oil, natural gas is preferable for the planet. (Ideally, U.S. energy policy should focus on expanding nuclear power instead of fossil fuels.) Concerns over methane or other chemical leaks can be ameliorated with better engineering practices. Similarly, any worries over earthquakes could be addressed by injecting wastewater into the ground in places where there are no preexisting faults. 

Additionally, fracking is clearly in America's national interest. There is broad political consensus that the United States would be better off relying on ourselves and our closest allies (like Canada) for energy, rather than on Middle Eastern countries who can be only charitably described as "frenemies."

In other words, compared to the status quo, fracking is good for the planet and bad for our enemies. Russia's economy, which is largely dependent on exporting fossil fuels, could face collapse if oil and gas prices fall too far. That is why RT is fearmongering about fracking; it wants to decrease the global supply of fossil fuels (which keeps prices artificially high) as part of a strategy to keep Russia's economy alive.

Thus, environmentalists like Joe Romm and the protesters who block fracking and the construction of pipelines, such as Keystone XL and Dakota Access, are serving as "useful idiots" for Vladimir Putin. They falsely believe they are doing good for America and the planet when, in reality, they are only doing good for the Kremlin.

Worse, some anti-fracking protesters are not merely useful idiots but are willing puppets of the Putin regime. In 2014, the New York Times reported on suspicions that the Russian government was funding anti-fracking protests in Romania and Lithuania, countries which are reliant on Russia for fossil fuels.

In a recent interview, President Obama correctly observed that "Vladimir Putin is not on our team." Neither are anti-fracking protesters.

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