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Nicolas Loris in The Heritage Network publication The Foundry July 21, 2011 at 3:00pm
According to many experts, the United States stands to be the Saudi Arabia of natural gas production. Last month, the New York Times reported otherwise, questioning the economics of shale gas extraction and overstating the amount of gas available in the vast formation in the United States.
The story included links to hundreds of e-mails from some independent energy executives and state geologists calling shale gas a Ponzi scheme and inducing fears of another Enron-like scandal or a subprime mortgage crisis. Yesterday, the Energy Information Administration’s Howard Gruenspecht testified Tuesday before the Senate Energy and Natural Resources Committee defending the federal government’s estimates. Gruenspecht said:
I believe EIA is doing a solid job of effectively tracking the emergence of shale gas in the U.S. energy system and thoughtfully reflecting that in our projections. We’re very comfortable with where we are. We’ve seen nothing in the New York Times report that would cause us to change our view.
Gruenspecht wasn’t the only one to criticize the report. Energy in Depth, which represents America’s natural gas and oil producers, thoroughly takes the Times piece to task, labeling it the newspaper’s “‘Dewey-Defeats-Truman’ Moment on Shale.” In fact, at the same hearing yesterday, Ernest Moniz from MIT defended his team’s study that had promising predictions for shale gas production that used data from government agencies and other independent data sources. Moniz calls shale gas production a “game-changer,” and the MIT study projects that the United States has 92 years’ worth of natural gas at current consumption rates.
Natural gas in the United States is an important source of energy, and increasing production can help meet rising energy demand, increase jobs, and drive economic growth. Several states have already tremendously benefited from increased production. Professor Timothy J. Considine estimates that the total value added in gross regional production to Pennsylvania and West Virginia from production in the Marcellus shale formation was $4.8 billion, and the production generated over 57,000 jobs in 2009 alone. A recent study from the Manhattan Institute approximates that ending New York’s moratorium on hydraulic fracturing would create up to 18,000 jobs in the Southern Tier and western New York and increase economic activity by $11.4 billion.
In either case (an abundance of shale gas or no shale gas in the United States), there is no reason for policymakers to unreasonably increase regulations that make it difficult or impossible for investors and energy companies to pursue natural gas production. Nor is having an abundance of natural gas a reason to subsidize the production of it. Natural gas policy should focus on increasing access and opening markets, not unreasonably increasing regulations. This would allow natural gas production to succeed or fail on its own.
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http://topics.nytimes.com/topics/news/business/companies/westport-innovations-inc/index.html
By inserting the above link you will find information about Westport Innovations, a Canadian Company actively involved in converting diesel engines to LNG.(A good investment too) This is also the reference source to the UPS article below. JLCpulse
U.P.S. Finds a Substitute for Diesel: Natural Gas, at 260 Degrees Below Zero
By MATTHEW L. WALD
United Parcel Service U.P.S. is about to add 48 trucks powered by liquefied natural gas and would like to deploy more.
The final frontier for alternative motor fuels, powering big tractor-trailers, has been crossed.
The alternative is natural gas, but not in the now-familiar form of compressed gas. Instead, a growing number of the biggest trucks are running on liquefied natural gas. Burdened by diesel prices that topped out at over $5 a gallon in 2008 and mindful of the sustained collapse of natural gas prices, trucking companies are expressing new interest in liquefied natural gas for their thirstiest trucks, the over-the-road 18-wheelers.
“It’s the only long-term viable option to diesel,’’ said Michael G. Britt Sr., director of maintenance and engineering at United Parcel Service, which is about to add 48 L.N.G. trucks and would like to deploy many more, if the fueling infrastructure is in place and if truck production volume rises enough to bring down costs. Many other companies are running test fleets.
Compressed natural gas is not a practical substitute for diesel with these tractor-trailers, because they burn so much fuel on a trip, consuming 20,000 to 30,000 gallons a year. From an energy and environmental standpoint, they are a prime target because collectively they account for three-quarters of the fuel used by commercial vehicles. By one estimate, switching to liquefied natural gas could reduce oil imports by more than a million barrels a day.
According to Rich Kolodziej, the president of NGV America, a trade association, the amount of diesel fuel currently used annually for highway travel would work out to six trillion cubic feet of natural gas. (Current national natural gas demand over all is in the range of 22 trillion cubic feet a year.) Prices are depressed because of the recession and because the government has sharply raised its estimate of gas reserves as a result of the expansion of a drilling technique known as hydraulic fracturing, or fracking.
Natural gas prices per million B.T.U., the standard unit for gas, rose to over $12 before the recession began, but are now in the range of $4 to $4.50.
Scientists and engineers are working on another alternative for these trucks, diesel fuel made from some renewable source, but have not found a formula for commercial success. So the best alternative appears to be liquefied natural gas.
L.N.G. requires only about 70 percent more space than diesel fuel. Compressed gas, in contrast, needs about six times as much space as diesel, even when squeezed down to 3,000 pounds per square inch.
U.P.S. plans to begin adding 48 liquefied natural gas trucks to its hubs in Ontario, Calif., and Las Vegas in the next few days. These will be 15-liter, 450-horsepower diesel engines, the biggest in common use on the highways. Like engines running on diesel fuel, they work without spark plugs, igniting the fuel through compression. Compression-ignited engines are more efficient than spark-ignited engines, so they get more work out of a given amount of fuel.
Upon start-up, they will use a few squirts of diesel to get going; a computer will also add diesel fuel when it senses that the engine needs it for lubrication. But over all, diesel use will be cut by about 95 percent.
U.P.S. runs a virtual menagerie of alternative vehicles using propane, batteries or hydrogen fuel cells. Some are hybrids that use hydraulic pressure instead of electric batteries.
But natural gas chilled to 260 degrees below zero and squeezed down 600 times in volume is the company’s choice, Mr. Britt said. His 450-horsepower tractors need so much energy to tow two trailers over mountainous terrain that “the first trailer would have to be all batteries,’’ he said.
U.P.S. received $5.5 million for the project from the state of California that was allocated by the federal Energy Department. The company used $4 million to pay for the extra cost of the trucks and funneled $1.5 million to Clean Energy of Seal Beach, Calif., to build a fueling station.
U.P.S. is not alone. Kenworth, the truck manufacturer, reports several orders in the last few weeks for L.N.G. trucks. Eighteen went to Enviro Express, a company in Bridgeport, Conn., that uses them to haul trash and recyclables. And the truck maker Peterbilt said in January that a trucking company in British Columbia had ordered 50 L.N.G. trucks.
The ports of Los Angeles and Long Beach, Calif., run about 1,000 trucks on liquefied natural gas, but outside of that, only about 300 others are running around the country, according to Clean Energy, a company that supplies compressed and liquefied gas.
But Westport Innovations of Vancouver, British Columbia, which makes engines that are certified by the United States Environmental Protection Agency to run on liquefied natural gas, said it had orders for 230 engines in the next 12 months. It has not announced total orders for its past fiscal year, but in the first three quarters it sold fewer than 30.
Chilling the gas into a liquid costs energy, but Clean Energy says that a lot of gas is already being liquefied anyway. Natural gas refineries chill the gas that drillers take out of the ground to separate naturally occurring molecules like pentane, ethane and propane and to make a product that meets the specifications needed for gas pipelines, said James N. Harger, the company’s chief marketing officer.
Clean Energy, which was founded by T. Boone Pickens, is selling an amount of natural gas that is equivalent to a gallon of diesel for $1.25 less, a major consideration in vehicles that use hundreds of gallons a week. But then there’s the $1.5 million cost of building an L.N.G. fueling station with several bays for trucks, Mr. Harger noted.
A spokesman for Westport, the engine company, said the fueling problem was “your classic chicken and egg.’’
“The incumbent petroleum-based fuels have this continental network of fueling stations, and natural gas has that as well, but it’s going through a pipeline to feed people’s homes and the power industry,” he said. The challenge is to furnish it in a form that vehicles can use in the same sort of ubiquitous way that trucks use diesel, he explained.
“The key is to get the number of trucks up,’’ he said.
U.P.S. has about 17,000 big tractor-trailers and would like to switch 1,000 of them to liquefied natural gas, but cannot do so now because the fuel is available in only a handful of places. Production volumes of the trucks are so low that their cost remains high, about $200,000, compared with only about $100,000 for a standard diesel truck, according to Kara Gerhardt Ross, a U.P.S. spokeswoman.
But the company’s demonstration fleet, 11 vehicles shuttling between Ontario, Calif., and Las Vegas, has shown that the trucks can handle the most demanding situations, like hauling multiple trailers over mountain ranges, U.P.S. says- Details
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There has been some chatting about the market for composted cow Sh-t! It seems that one way to dry out the millings and slurry developed when drilling a gas well is to mix them with dried, composed manure. This helps to rapidly absorb the moisture, making it faster and easier to dispose of the millings. We understand that in Pennsylvania, landfills will not accept any liquid waste which is the form of the drill millings and slurry at the well site. We have heard that at least one large dairy farmer has been approached about building a substantial manure composting facility to make material to be used for this purpose using their waste manure. Seems like a solid way to solve a couple of disposal problems.JLCpulse
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http://www.nypost.com/p/news/
It sure feels good to have the Govenor paying attention!! JLCpulse
It's a ga$! New study fuels fracking backing
By FREDRIC U. DICKER State Editor
July 22, 2011
ALBANY -- Gov. Cuomo is hailing a new Pennsylvania study showing that the huge Marcellus Shale natural-gas field on the New York border could supply 25 percent of the nation's gas needs and create hundreds of thousands of jobs.
Cuomo -- who's weighing a late-June report by the state Department of Environmental Conservation concluding that controversial "hydrofracking" gas drilling could be done safely in most parts of the Southern Tier -- said the Pennsylvania report showed the enormous potential for job creation and economic development that the drilling offered New York.
"Assuming it can be done safely and is properly regulated, the economic reports from Pennsylvania show the potential financial and economic rewards from developing this industry," said Cuomo spokesman Joshua Vlasto.
The new report, prepared by Penn State University researchers at the behest of the Marcellus Shale Coalition, an industry-funded group, found that investment and production in the Marcellus Shale fields -- adjacent to New York's Southern Tier -- has been skyrocketing.
It found that gas production had quadrupled from 2009 to 2010 and that the number of wells brought into operation grew by 77 percent.
The study estimated that gas production this year would rise by an additional 250 percent and that during the next nine years, Marcellus Shale production could supply 25 percent of the nation's natural-gas needs.
It also projected that 2,300 new wells may be drilled this year and another 2,400 in each of the next five years.
The amount of money being spent in Pennsylvania to drill the wells is also staggering.
The report projected that spending on gas production would hit $12.7 billion this year, up from $3.2 billion in 2008.
It said the number of workers supported by the gas industry would likely hit 156,000 this year, up from 60,000 in 2009 and 140,000 last year.
Meanwhile, a think tank affiliated with the state Business Council predicted that 125,240 private-sector jobs could be created if New York permitted the drilling of less than half the 2,400 wells slated to be drilled this year in Pennsylvania.
"This figure escalates to 250,480 jobs if 2,000 wells were to be drilled" in New York, according to the Business Council's Public Policy Institute.
Cuomo has backed the DEC report, asserting that hydrofracking could be done in the Southern Tier while banning it from watershed areas, including New York City's.
To help oversee the drafting of gas-drilling regulations for New York, Cuomo has named a 13-member advisory group "of nationally recognized experts," including his former brother-in-law Robert Kennedy Jr., a prominent environmental activist.
READ MORE
- New Pa. Marcellus Shale Study Available HERE; Fact Sheet HERE.
- Highlights From New Marcellus Study: “Prolific Marcellus Could Soon Lead US in Gas Production”
- By The Numbers: What Responsible Clean-Burning American Natural Gas Development Means For NY
- Video: The Marcellus Shale: An American Renewal
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Hudson-Catskill Newspapers
Published: Friday, July 22, 2011 2:12 AM EDT
MARGARETVILLE — The Delaware County Board of Supervisors has come out in opposition to proposed regulations that would effectively ban gas drilling in watersheds that are located within the county.
At issue is a controversial method of extracting natural gas from shale formations deep underground using horizontal drilling and the injection of water, sand and chemicals under extremely high pressure to fracture the rock formation to release the gas.
Under the Supplemental Generic Environmental Impact Statement that was partially released by the state on July 1, no gas wells would be permitted within New York City’s vast watershed. In addition, the watershed for the Syracuse area would also be off-limits.
Other proposed restrictions would prohibit drilling within 1,000 feet of a watercourse and 500 feet from a well head. In addition, it would prohibit drilling within 1,000 feet of any NYC reservoir or aqueduct infrastructure.
There have been calls to totally ban gas exploration anywhere in the state as well as a ban on hydraulic fracturing, also known as fracking. Opponents of fracking site cases where accidents and poor oversight in neighboring states where gas exploration is already underway have caused environmental disasters. But some of the largest deposits of natural gas in what is known as the Marcellus Shale formation is located in parts of Delaware County. The vast formation extends from Ohio, Pennsylvania, Virginia and New York and is said to hold enough natural gas to meet the energy needs of NYS for decades. It is estimated that there are currently some 20,000 gas wells in production in New York State although it is not believed that any are using the controversial fracking method.
Some local and county officials see these gas deposits as having the potential of turning around the stagnant economy of the region that is beset with high unemployment, a dwindling tax base and declining population. At a recent meeting of the Coalition of Watershed Towns, executive committee member Peter Bracci, supervisor of the Town of Delhi called the existence of such large quantities of natural gas “a game changer” for upstate communities.
The Board of Supervisors Chairman James E. Eisel Sr. has written a letter to the Coalition of Watershed Towns seeking its support in opposing any special regulations that rob residents of Delaware County of the mineral rights on their property without due compensation.
This is the second time the Board of Supervisors has sought the assistance of the Coalition. When new drilling regulations were first proposed, the supervisors were opposed to any special regulations imposed on watershed communities. Eisel notes that over half of Delaware County falls within NYC’s watershed and with additional restrictions on drilling, some 57 percent of the land is off-limits to drilling. And if the Delaware River Basin Commission enacts similar regulations and restrictions, as much as 80 percent of the county would be off-limits to drilling.
“Today, I am seeking from CWT continued support for our position that lands in the watershed should be treated the same as the balance of those outside the watershed,” said Eisel.
There was unanimous support for Delaware County’s request while not actually taking an official position on drilling. CWT attorney Jeffrey Baker asked why there is a need for a different set of regulations if the process is considered safe for other parts of the state and is highly regulated. He noted that gas drilling was taking place many miles below ground and far away from any ground water.
“This is very much a home-rule issue,” said Baker. “Why should control be taken away from the Catskill communities?” When the Watershed Memorandum of Agreement was under discussion some 20 years ago, CWT successfully fought for the rights for individual communities to retain local zoning regulations and home rule in watershed affairs.
Baker also noted that those communities opposed to gas drilling can ban the practice. Since the state has been working on a blanket set of regulations to cover all gas drilling in the state for over two years, there has been ample time for individual communities to amend their zoning laws accordingly.
“If you have zoning in place, you can prohibit it,” said Baker. “If not, you can’t.”
Gov. Andrew Cuomo recently announced the formation of an advisory board made up of members of environmental organizations, the gas industry, business groups and elected officials to review the proposed regulations and make recommendations to the governor’s office and the state Department of Environmental Conservation. Officials from Delaware County want representation on that board and the Coalition believes its membership should be further expanded.
“CWT should have a seat too,” said Ulster County alternate member Bruce LaMonda of the Town of Olive in Ulster County. He said excluding the watershed communities from the advisory board was an act of discrimination.
“We were not invited,” said Coalition Executive Director Dennis Lucas, supervisor of the Town of Hunter.
The Coalition unanimously approved a resolution supporting Delaware County’s request for support along with a request that the watershed communities and the Coalition of Watershed Towns be given a seat at the advisory committee’s table.
CWT’s next scheduled meeting is Monday, Aug. 15.
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