The Daily Bulletin - September 5, 2013
TODAY’S TAKEAWAY: THE UNEXPECTED BOOM IN ENERGY JOBS
Writing in Fortune, energy expert Daniel Yergin notes that the development of shale oil and tight gas are not only bringing forth new supplies and lower exports, but have produced an unanticipated surge in energy jobs. “The rapid rise in shale gas and tight oil in the United States constitutes nothing less than a revolution in oil and natural gas. No longer can there be any doubt about the dramatic change in America's energy position. U.S. oil production is up 50% since 2008, when we were supposedly slated to run out of oil. Natural gas production has increased by 33% since 2005, and shale gas alone now constitutes about 45% of total natural gas production. This revolution is not just about energy production; it's an economic story along several dimensions, whether measured in consumers' pocketbooks, jobs, U.S. manufacturing output, or America's increased competitiveness in the world economy. This has occurred amid a half-decade of deep recession and high unemployment. Indeed, without the boost from the unconventional oil and gas development, the U.S. economic picture would have looked even worse over the last few years.” Good news all around.
BUT CAN NATURAL GAS REPLACE MIDEAST OIL?
Writing in Resilience, however, Tom Whipple takes a less optimistic view on the possibilities of domestic energy development. He says it will not be enough to untether us form the Middle East: “The International Energy Agency reported that production shortfalls this summer resulted in the world consuming about 2.2 million b/d more than it produced with the remainder coming from inventories. These are now thought to be down about 95 million barrels from recent levels. World oil prices are now about $115 a barrel. Some of this is due to concerns about what will happen if we start bombing Syria, but the rest is due to slowly tightening supply/demand situation around the world. The Chinese are still growing their demand at prodigious rates and the world is still adding about 70 million new “oil consumers” to its population each year. Anyone who thinks that a short-lived burst of shale oil fracking in North Dakota and Texas is enough to counter the tides of history flowing across the Middle East simply does not understand the situation.” But it’s got to help.
GERMANS REVOLT AGAINST GREEN REVOLUTION
Over in Germany, the bills are coming due for Angela Merkel’s Energiewende and consumers don’t seem to like it. As today’s Charticle indicates, the Germans are now paying a 10 percent premium on electric bills and things are headed higher. In Forbes, William Pentland says this means real problems: “German consumers already pay the highest electricity prices in Europe and many of them are raising hell over the prospect of paying still more to support what the Spiegel calls the “aggressive and reckless expansion of wind and solar power. . . . In 2013, electricity from renewable energy will cost German consumers about $26 billion, a considerable premium compared to the cost of electricity generated by nuclear power plants and fossil fuels.” Somebody’s got to pay for this stuff somewhere.
IS THE NUCLEAR RENAISSANCE IN REVERSE?
We were supposed to be living in the midst of a nuclear renaissance but Mycle Schneider and Antony Froggatt, writing on Project Syndicate, says things are going in the opposite direction: Duke Energy, America’s largest utility, has shelved plans to build two reactors in Florida, after having spent $1 billion on the project. The decision came only three months after the company abandoned investment in two new units in North Carolina. In fact, this year, four American utilities have decided to shut down a total of five reactors permanently – the first closures in the United States in 15 years. One of the units – Kewaunee Power Station in Wisconsin – was abandoned after massive investment in upgrades and a 60-year license renewal; it simply could not generate power at competitive prices. For the same reasons, Vermont Yankee, another plant with a license to operate through 2032, is now scheduled to close in 2014. . . The shift to renewables has been particularly pronounced in the world’s major advanced economies. For example, Germany’s ongoing nuclear phase-out has been complemented by accelerated renewables implementation, with up to 3,000 MW of solar photovoltaic capacity connected to Germany’s power grid in a single month. As a result, the price per installed solar kilowatt has dropped by three-quarters over the last seven years.” Hey wait a minute! I thought that German transformation wasn’t working either.
WILL CHINA BLOW PAST EVERYBODY ON ENERGY CONSUMPTION?
Robert Rapier, writing on EnergyTrends Insider, says forget about all this business of whether renewables will replace nuclear. The real action is going to be in China: “Of particular interest to me were the agencies forecasts about China’s energy demand. Over the past decade, China has become the world’s largest energy consumer, as well as the world’s largest emitter of carbon dioxide. Chinese coal consumption is up 157 percent since 2002, and they now consume over 50 percent of the world’s coal. Their oil consumption rose by 5 million barrels per day (bpd) in the past 10 years, to nearly double the level of 2002. Of particular interest to me were the agencies forecasts about China’s energy demand. . . . But according to the EIA, we haven’t seen anything yet. In order to attempt to meet this demand, China truly has an “All of the above” energy strategy. Renewable energy advocates like to point to China’s huge investments in that sector as if to say that China is leading the way toward a clean energy future. But China is making major investments across their energy sector, including investments in many new coal and nuclear power plants. (China is expected to account for 40 percent of the world’s new nuclear power capacity over the next three decades).” Lots of dangers in this, lots of opportunity.
AN EX-HIPPIE MAKES A FORTUNE ON WINDMILLS
Finally, Sami Grover on MotherNatureNetwork, tells the story of Dale Vince, a British entrepreneur and ex-hippie, who has become a magnate of renewable energy. Wind entrepreneur Dale Vince used to live on a bus. Now he's one of Britain's richest men, and he has big plans to transform his country. He's gone from living off-grid on a bus to creating a wind energy empire that made him one of Britain's richest men. He's developed an electric car that broke the U.K.'s electric land speed record. A committed vegan, he bought a soccer club and banned meat from the stadium. And if that wasn't enough, he's invested in wave energy technology; developed new models for direct public investment in renewables; and created a nationwide electric car charging network running off renewables. You get the idea. The man likes to get things done” They say a lot of good ideas came out of Woodstock.