Marita Noon:
The geopolitics of oil go round and round
http://www.redstate.com/diary/energyrabbit/2015/03/30/marita-noon-geopolitics-oil-go-round-round/
The current region-wide sectarian war could easily bump oil prices up dramatically. And, the expected nuclear deal with Iran could drop them—dramatically.
By: Marita Noon (Diary) | March 30th, 2015 at 05:37 PM |
Many complicated factors contribute to the global price of a barrel of oil, but two of the leading components are supply and risk—and both have the potential to escalate in the days ahead. The current region-wide sectarian war could easily bump oil prices up dramatically. And, the expected nuclear deal with Iran could drop them—dramatically.
Oil price predictions today play like a game of roulette, or a carnival barker of days gone by, round and round it goes, where she stops, nobody knows.
A few weeks ago, addressing the need to open up access to mid-Atlantic oil resources, I wrote:
“With the current oil abundance, it may seem like an odd time to be going after more. However, the legal wheels that could allow limited access to the vast, untapped oil resources move very slowly. Today’s market conditions will fluctuate between now and 2035 when the global demand for energy is expected to spike. Not to mention the increasingly volatile situation in the Middle East, where new coalitions are already being formed: Iran and Iraq, Saudi Arabia and South Korea—just to name two. If one more beheading takes place or a bomb hits the right (or wrong) target, the region could erupt, and the entire energy dynamic would change. Considering the variables, American energy security is always something worth pursuing.”
Well, now the “entire energy dynamic” has changed.
First, the obvious: war in the Middle East.
Middle East unrest has historically sent oil prices soaring. With the recent regional conflicts involving ISIS, however, prices have continued to drop due to OPEC’s increased supplies, led by Saudi Arabia, in response to the new American energy abundance that changed the entire energy dynamic.
That dynamic has just changed again.
Referencing ISIS and the growing terrorism throughout the region, Jordan’s King Abdullah said in December, “this is our world war three.” At the time, pundits reacted with something akin to “well, maybe.” But that was then. Now, Saudi Arabia, backed by King Abdullah—who has declared “Jordan is fully committed to the Arab military effort in Yemen”—and an Arab coalition including the United Arab Emirates, Qatar, Bahrain, Egypt, and Kuwait, plus Morocco and Pakistan, who’ve expressed interest in joining, with intelligence and logistics support from the U.S., is bombing Yemen’s Houthi rebels, who have received training, weapons, and advisors from rival Iran.
As a result of the offensive, CNN Money reported: “Oil prices bounced higher on Thursday as Saudi Arabia launched airstrikes in Yemen, raising concerns that a regional conflict could disrupt supplies.” It added, “Saudi Arabia is the world’s largest oil producer, and investors fear its involvement in the unrest could have a negative impact on production.”
In one story, the Financial Times (FT), pointed to Yemen’s limited oil production and stated: “The attack is not expected to cause any major disruption to supplies.” And, in different coverage: “even as some observers raised concerns, others were more muted due to the size of Yemen’s oil output.”
Obviously, no one knows where “she’ll stop.” But the factor of “risk” which according to Richard Mallinson, geopolitical analyst at the London-based consultancy Energy Aspects, the markets had “since last year turned away from paying attention to,” is back. The FT quotes him as saying: “The reality is that geopolitical risk is as high as it has been in a long time.” Increased risk means higher prices.
It gets more complicated.
The Obama administration continues to negotiate with Iran with the intent of crafting a nuclear deal that will, ultimately, lift the sanctions against the oil-producing county—which would allow it to increase oil exports. Because of the sanctions, Iran’s oil exports have been cut in half—resulting in a “severely strained economy.” Iran has large amounts of oil already in storage and, according to the FT, “will fight for its market share.”
Iran wants the sanctions lifted immediately. If that happens, the FT reports there will be “an injection of hundreds of thousands of barrels a day into the oil market already struggling with a crude overhang”—which “could depress prices further.” Increased supply means lower prices.
Energy economist Tim Snyder explains it this way: “The Iranians will be free to put another 1 million barrels of crude oil production on the world market. The Iranian production will represent a doubling of the current oversupply vs. world demand and will put additional downward pressure on the world crude oil price.”
Frequently calling us “the great Satan,” Iran continues to hate the U.S. Falling oil prices could serve as a death knell to America’s oil abundance (not to mention countries, such as Venezuela, that depend on oil revenues). However the low prices would, overall, be good for western economies—but bad for Iran and its friend, Russia.
The way to better benefit the Iranian economy, once sanctions are lifted, is to raise oil prices—which Iran can do through the war in Yemen.
Perhaps Saudi Arabia jumped the gun in its attacks in Yemen. Perhaps, Iran thought it would have the deal with the P5 +1 group (U.S., U.K., France, Russia, China, and Germany) signed before the unrest pushed up the prices.
With Iran calling the shots in Yemen, it (not the friendly-to-the-west president) could control the Bab el-Mandeb strait and the million barrels of crude oil that pass through the strait each day, not to mention, the goods that transit the strait coming from the Far East. CNN Money notes: “Adding to the uncertainty is Yemen’s strategic location on a shipping route linking the Mediterranean and the Indian Ocean.” Each day, upwards of 3.8 million barrels of oil and refined petroleum products flow through the Bab el-Mandeb strait to the Red Sea—making it one of the world’s key oil chokepoints. Blocking the strait could cause a major disruption in global crude oil prices.
But there is more.
Iran can impede the flow of traffic through the Strait of Hormuz, which is the world’s most important oil chokepoint with 17 million barrels of oil a day (representing more than 30 percent of the world’s seaborne-traded oil) flowing through it.
With the ability to disrupt both straits, Iran would have the ability, if the sanctions are lifted due to the Obama administrations’ eagerness for a deal, to potentially escalate the price of oil to $200 a barrel—which would, not only change the geopolitics, but world economies as well. (Remember, Iran didn’t support OPEC’s November decision to keep production high and prices low.) Iran would be controlling a large part of the worldwide flow of oil and the high prices would boost, not only its economy, but Russia’s as well—while the limited access punishes Saudi Arabia and the high prices could badly damage Western economies. And, neither Iran nor Russia has to increase production to benefit—but if they do, their economic return becomes even greater.
Will Iran sign the deal and have its sanctions removed, allowing it to inject millions of barrels of oil into an already glutted global market? Whether or not it signs the deal, Iran can still penalize the U.S. and Saudi Arabia, and as a result the rest of the world—making Yemen a spot on the map we should all care about.
Round and round she goes, where she stops nobody knows. “Considering the variables, American energy security is always something worth pursuing.”
The author of Energy Freedom, Marita Noon serves as the executive director for Energy Makes America Great Inc. and the companion educational organization, the Citizens’ Alliance for Responsible Energy (CARE). She hosts a weekly radio program: America’s Voice for Energy— which expands on the content of her weekly column.
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Marita Noon:
Oil and gas exports—one policy change, many benefits
If Congress could muster up the political will to lift the arcane oil export ban, the U.S. could emerge as a major world exporter.
By: Marita Noon (Diary) | March 23rd, 2015 at 11:44 AM |
“Businesses that sell to foreign markets put more people to work in high-quality jobs, offering more Americans the chance to earn a decent wage,” claimed the Obama administration’s Secretary of Commerce Penny Pritzker in a March 18 Wall Street Journal (WSJ) opinion piece.
She makes a strong case for U.S. exports: “jobs in export-intensive industries pay up to 18% more than jobs not related to exports.” Her premise is: “The U.S. economy ended 2014 on the uptick, and exports added to the momentum.” Noticeably absent is any mention of the potential for “high-quality jobs” and economic “uptick” that would come from the export of America’s abundant oil-and-natural gas resources—something an executive order could expedite; something her office could champion.
Pritzker states: “From large enterprises and multinational corporations to small startups and local manufacturers, an increasing number of businesses are realizing that their customer base is no longer around the corner, but around the world. They understand that 95% of the world’s customers live outside the U.S., and to succeed in the 21st century, they must find a way to reach consumers in ever-expanding markets.” Penny, this is especially true for American energy!
Due to the modern technologies of horizontal drilling and hydraulic fracturing—developed and refined within our borders—the U.S. is producing more oil and natural gas than in decades. So much that we are nearly out of places to store it. We know how to produce it safely and cheaply. But, unlike the airplanes Pritkzer’s co-author Jim McNerney, CEO of Boeing Co., builds, the oil-and-gas industry is prevented from sending its abundance to “foreign markets”—including our allies in Europe who are dependent on energy from a source that uses it as a weapon against them.
The same day WSJ published Pritzker’s piece, it featured a news story announcing: “some of the world’s biggest oil companies are starting to give up” on “hydraulic fracturing wildcatting in Europe, Russia and China.” This, despite the fact: “Eastern European officials who were eager to wean their nations off of Russian gas welcomed the explorers.” It explains: “Wells in Poland and China can cost up to $25 million each, while American wells on average cost about $5 million”—resulting in overseas costs to produce a barrel of shale oil that are higher than what it can be sold for with the current world-wide low prices.
In trade negotiations, the U.S., according to the New York Times (NYT), “typically argues that countries with excess supplies should export them.” We have excess supplies of both crude oil and natural gas that has driven down prices—resulting in “trouble for an industry that has done much to keep the national economy afloat in recent years.” We “should export them”—but we aren’t.
“Why can’t we export crude oil and natural gas?” you might ask—especially when the U.S. can export refined petroleum products such as gasoline, diesel, and jet fuel. The NYT explains: “In 2011, the country pivoted from being the world’s largest importer of petroleum products to becoming one of the leading exporters.” At that point, for the first time in 21 years, refined petroleum became our number one export product—though Pritzker never mentioned that.
The “energy world changed.” But, as NYT points out, exports could soak up the excess production, “but there are still political hurdles.”
For crude oil, the problem is energy policy enacted before the “energy world changed.” Signed into law in 1975, after the 1973 Arab oil embargo shook the U.S. with high oil prices, the goal of the Energy Policy and Conservation Act, according to the International Business Times, was “to stifle the impact of future oil embargos by foreign oil producing countries.” The result was a ban on most U.S. oil exports—though some exceptions can be made and the Commerce Department has recently given export licenses to two companies for particular types of oil. The WSJ reports: “Ten companies have applied for similar ruling to export oil.”
For natural gas exports, the problem is two-fold. Exporting natural gas is not prohibited, but it is not encouraged or made easy. In order to export natural gas, it must be converted into Liquefied Natural Gas (LNG)—which is done at multibillion-dollar facilities with long lead times for permitting and construction that require purchase contracts to back up financing. Many potential customers for U.S. LNG are non-Free Trade Agreement (FTA) countries.
Currently, Breaking Energy (BE) reports, “the Department of Energy (DOE) has issued five final and four conditional approvals for LNG export to non-FTA countries.” The Financial Times says about two dozen U.S. LNG export facilities have been proposed with four “already under construction, which have contracts to back up their financing.” Last month, according to Reuters, looking to reduce dependence on supplies from Russia, Lithuania signed an agreement to purchase LNG from the U.S.’s first export terminal: Cheniere Energy Inc.’s Sabine Pass, which is expected to send its first cargoes by the end of this year.
Fortunately, as I predicted in November, there are fixes in the works that, as energy historian Daniel Yergin said, symbolize “a new era in U.S. energy and U.S. energy relations with the rest of the world.”
In January, Senators Sen. John Barrasso (R-WY)68% (R-WY) and Sen. Martin Heinrich (D-NM)0% (D-NM) introduced the LNG Permitting Certainty and Transparency Act to expedite DOE decisions on LNG export applications. It specifically requires a decision on any LNG export application within 45 days after the environmental review document for the project is published. Currently, applications to export natural gas to non-FTA countries require the Secretary of Energy to make a public interest determination which includes a public comment period. Not surprisingly, “environmental groups are lobbying the Obama Administration to veto the bill.” BE states: “The bipartisan bill could garner enough votes to gain a filibuster-proof majority in the Senate.”
A month later, Rep. Joe Barton (R-TX)70% (R-TX), along with 14 co-sponsors, introduced a bill to end the crude oil export ban: HR 702. On March 25, the House Foreign Affairs Committee will meet to debate and vote on the bill—though its passage is not as optimistic as the LNG bill. Bloomberg sees that lawmakers on both sides of the aisle are weary, fearing “that they’d be blamed if gasoline prices climb after the ban is lifted.” Oil producers support lifting the ban, while refiners oppose it.
In October, David Goldwyn, the State Department’s coordinator for international energy affairs in the first Obama administration, said: “The politics are hard.” He added: “When the economics become overwhelming the politics will shift.” The NYT stated: The telltale sign of a glut will be a collapse in the West Texas Intermediate (WTI) price, the principal American oil benchmark, which is currently [October 2014] about $3 below the world Brent price.” It continues, “If the spread cracks open, the economic arguments for free export of domestic crude will probably win the day.”
That day may have come. On March 13, the WSJ editorial board announced: “WTI now trades 20% below the world market price.” Holman Jenkins, who writes the Business World column for the WSJ, says: “Oil producers are already being denied a premium of $12 a barrel by not being allowed to export this oil.” Thomas Tunstall, research director at the University of Texas at San Antonio’s Institute for Economic Development, reported: “Before the rapid increase in U.S. oil and gas production, WTI historically sold at a slight premium to Brent, typically about $1-$3 per barrel.”
“U.S. pump prices are mainly tied to the price of Brent crude, which is freely traded on the world market and is higher than it might otherwise be because of the ban on U.S. exports,” explains the WSJ. “If U.S. producers were allowed to compete globally, prices of Brent and WTI would converge over time, and U.S. gasoline prices would come down, all things being equal.”
Now, the “industry that has done much to keep the national economy afloat” is in trouble. There have been some 74,000 layoffs in the U.S. oil patch since November.
If Congress could muster up the political will to lift the arcane oil export ban, the U.S. could emerge as a major world exporter, which according to the NYT, would result in the “return to a status that helped make the country a great power in the first half of the 20thcentury.” Yergin adds: “Economically, it means that money that was flowing out of the United States into sovereign wealth funds and treasuries around the world will now stay in the U.S. and be invested in the U.S., creating jobs. It doesn’t change everything, but it certainly provides a new dimension to U.S. influence in the world.”
Pritzker brags that the Commerce Department has “worked with the private sector to help businesses reach customers overseas; … to open new markets for U.S. goods and services; to reform the export-control process; and to overcome barriers to entry.” For U.S. oil-and-gas producers the biggest barrier to reaching customers overseas and opening up new markets is our own energy policy—something the administration and Congress have taken steps to fix. According to Bloomberg, if they knew the public was with them, lawmakers could easily save American jobs and investment, lower gasoline prices, help balance our trade deficit, aid our allies, and increase U.S. influence in the world.
The author of Energy Freedom, Marita Noon serves as the executive director for Energy Makes America Great Inc. and the companion educational organization, the Citizens’ Alliance for Responsible Energy (CARE). She hosts a weekly radio program: America’s Voice for Energy—which expands on the content of her weekly column.
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Marita Noon:
Access to mid-Atlantic energy resources advances
long-term energy security
http://www.redstate.com/diary/energyrabbit/2015/03/16/marita-noon-access-mid-atlantic-energy-resources-advances-long-term-energy-security/
With the current oil oversupply, it may seem like an odd time to be going after more.
By: Marita Noon (Diary) | March 16th, 2015 at 01:54 PM |
At the end of January, the Obama administration announced the next step in a long process that could result in the exploration and ultimate extraction of oil-and-gas resources of the U.S. mid-Atlantic—something the Outer Continental Shelf (OCS) Governors Coalition supports. On March 30, the 60-day comment period ends. If everything goes well, we could see new American resources on the market in twenty years.
With the current oil oversupply, it may seem like an odd time to be going after more. However, the legal wheels that could allow limited access to the vast, untapped oil resources move very slowly. Today’s market conditions will fluctuate up and down many times between now and 2035 when the global demand for energy is expected to spike. Not to mention the increasingly volatile situation taking place right now in the Middle East, where new coalitions are already being formed: Iran and Iraq, Saudi Arabia and South Korea—just to name two. If one more beheading takes place or a bomb hits the right (or wrong) target, the region could erupt, and the entire energy dynamic would change. Considering the variables, American energy security is always something worth pursuing.
The planning for the 2017-2022 OCS leasing program began June 2014, when the Bureau of Ocean Energy Management (BOEM) issued a request for information and comments. Then, in January, it published the Draft Proposed Plan; the Final Proposed Plan is anticipated in Q4 2016 or Q1 2017, with it probably taking effect in Q2/Q3 2017. The 2017-2022 plan proposes just one mid-Atlantic lease sale six years from now—and even its future is precarious. The mid-Atlantic currently has no leases in federal waters.
Explaining the process, Offshore magazine writes: “The OCS Lands Act requires the Secretary of the Interior to prepare a five-year program that includes a schedule of potential oil and gas lease sales and indicates the size, timing and location of proposed leasing activity as determined to best meet national energy needs, while addressing a range of economic, environmental and social considerations.”
BOEM estimates that the entire U.S. OCS holds approximately 90 billion barrels of oil and more than 400 trillion cubic feet of natural gas which are technically recoverable. Based on 30 to 40 year old data, it estimates that the mid-Atlantic OCS may contain approximately 8-9 billion barrels of oil equivalent—which at current consumption rates would be enough to meet South Carolina’s needs for 67 years. New seismic and other geological and geophysical surveys are needed. Modern practices and technologies will provide a more comprehensive view that will help make informed decisions on using the resources.
While the proposal for possible mid-Atlantic development faces opposition from environmental lobbyists, who call it a gift to oil-and-gas interests and an anchor to the “dirty fossil fuels of the past,” it enjoys a favorable political climate in the affected coastal states, where polls show citizens support offshore drilling.
When the January announcement came out, North Carolina’s Republican Governor Pat McCory, chairman of the OCS Governors Coalition, applauded the proposal: “Responsible exploration and development of oil and gas reserves off our coast would create thousands of good paying jobs, spur activity in a host of associated industries, generate billions of dollars in tax revenue and move America closer to energy independence.” Even Virginia’s Democrat Senators say the proposal is a “significant step … that should result in safe, responsible development of energy resources off the Virginia and mid-Atlantic coasts.”
Both the senators and governors want to see legislation passed that would provide for the same type of revenue-sharing system currently applied to the Gulf States to compensate local communities for additional infrastructure, environmental protection, and other coastal management needs generated by the new economic activity. If Congress allows revenue sharing, Brydon Ross, Southeast director of the Consumer Energy Alliance (CEA), predicts: it “could generate more than $10 billion in revenue combined for critical public budget infusions without taxpayer dollars.”
Unfortunately, even though it is included in the draft proposal and is supported by lawmakers in the impacted states, future mid-Atlantic resource development is not a sure thing. The Washington Post (WP) calls the plan: “politically fraught.” Jeremy Kennedy, an attorney who focuses on domestic- and international-energy transactions, says: “The planning, review and adoption of the 2017-2022 leasing program is, at its core, a political process.”
“This is a political plan,” Randall Luthi, president of the National Ocean Industries Association, stated: “not a plan based on science and resource data”—though he acknowledged it “is a small step in the right direction.” Luthi added: “Our members are encouraged by the decision to further analyze the mid- and south-Atlantic areas, which have not been included in a leasing program for over two generations.”
The 2017-2022 five-year plan is still in the early stages. Addressing the ongoing process, Kennedy explains: “Each of the steps … will winnow the scope of the 2017-2022 leasing program.” The WP reports: BOEM “could decide to narrow—but not expand—the proposed leasing area before it is finalized.”
Kennedy sees that “little is certain at this time.” After all, the Obama administration has killed previous potential lease sales. “Once published,” he states, “planned lease sales can always be cancelled or delayed by the Interior Department, president or Congress.”
Will the U.S. pursue development of our own offshore oil-and-natural gas resources in the Atlantic, as Canada, Cuba, the Bahamas, and South American Atlantic-coast countries are doing? No one really knows—but we should. Supporters of American energy security need to get involved in the “political process” by making our voices heard. Add your public comment before the March 30 deadline. Tell BOEM: “America can balance energy production with environmental protection.” Let Interior Secretary Sally Jewell know that you support “Greater access to our bountiful energy resources and advancing long-term energy security, while growing our coastal communities.”
The CEA has a customizable letter to make it easy for you to “act now!”
The author of Energy Freedom, Marita Noon serves as the executive director for Energy Makes America Great Inc. and the companion educational organization, the Citizens’ Alliance for Responsible Energy (CARE). She hosts a weekly radio program: America’s Voice for Energy—which expands on the content of her weekly column.
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WIND, SUN FREE; SOLAR, WIND POWER EXPENSIVE
The sun and the wind are free, but converting them to reliable electricity is expensive, if not impossible.
http://www.breitbart.com/big-government/2015/04/06/wind-sun-free-solar-wind-power-expensive/
by MARITA NOON6 Apr 201525
In an effort to get America off of fossil fuels, “free” solar and wind energy is often touted as the solution. However, in reality, the so-called free energy has high costs and does little to minimize fossil-fuel use or cut greenhouse gases.
Because solar-and-wind energy are not available 24/7—also frequently referenced as not “dispatchable”—incorporating them into the electricity portfolio requires back-up power to be available on demand. When the sun doesn’t shine or the wind doesn’t blow, we still expect to have heating or air conditioning, cook our dinners, charge our phones, and use our computers. This requires fossil fuels—typically natural gas “peaking plants,” but depending on what is available, it may be a coal-fueled power plant that is forced to operate inefficiently, releasing more CO2 than it would if allowed to operate as intended.
Think of it this way.
If you want to cook a hamburger, and you have a charcoal grill, you go outside about 30 minutes before you plan to cook. You mound up the charcoal, sprinkle it with lighter fluid, and toss on a match. When the coals are white on the edges, you know they are ready. You put your burger on the grill and cook it for five to eight minutes. Once you remove the burger, the coals are still hot for hours. Ultimately, they burn down to ashes and are cold enough that you can throw them into your plastic trash can, or into the forest. To restart it later in the same day is not efficient.
By comparison, if you are going to cook that same hamburger over natural gas, or propane, you go out five minutes before you plan to grill to heat up the elements. You cook your burger, and you turn it off. No coals, no cool down needed.
Power plants function in a similar fashion.
A coal-fueled power plant cannot easily be turned on and off. It works most efficiently—i.e., cleanly—when it burns continuously. Like the grill, you can add more coal throughout the process to keep the temperature up, which creates the steam that generates electricity.
But with a natural-gas-fueled power plant you can easily turn it on and off. So when the wind suddenly stops blowing—with no warning, the gas plant can quickly ramp up to generate the needed power.
As Germany, with the highest implementation of renewable energy of any country, found out, to maintain grid stability, it needs the coal- and natural-gas-fueled power plants. As a result of its policies that favor renewables, such as solar and wind, Germany has had to subsidize its fossil-fueled power plants to keep them open.
So, by adding solar and wind power, to the energy mix, we actually increase costs by paying for redundant power supplies—which ultimately, through rate increases, hurts the less fortunate who also have to cover the costs of the renewables.
In the cold weather of Albuquerque’s winter, I received a call from an “unemployed single mother living in an 800 square-foot apartment.” When I answered the phone, she dumped on me. She was angry. Her life circumstances meant she didn’t turn on her heat because she couldn’t afford it. After stating her position, she ranted at me: “I just opened up my utility bill. I see that I am paying $1.63 a month for renewable energy.” She continued: “I don’t give a f#*! about renewable energy! Why do I have to pay for it?”
I tried to steer her attention away from the utility company and toward the legislature that nearly a decade ago passed the Renewable Portfolio Standard, which requires increasing amounts of more expensive renewable energy. As a result, her rates went up, and she had no say in the matter—except that she may have voted for the legislators who approved the policy.
Recently, in Florida, the state NAACP chapter had an op-ed published that, essentially, said the same thing: renewable energy costs those who can least afford it.
It is not that renewable energy is bad. I have friends who live off the grid. They are cattle ranchers, who live in New Mexico’s Gila Forest. Were it not for their solar panels, they’d have no lights, no computers, no direct contact with the rest of the world. For them, solar panels on the roof—with a back-up system of car batteries—are their salvation. At a cost that worked for them, they were able to purchase used solar panels that someone else had discarded. They are grateful for their solar panels, but they have little option—and they know that, they accept it.
Without thinking of what works well in each situation, government has tried to apply a one-size-fits-all solution. Based on a phony narrative of energy shortages and global warming, err, climate change, renewables have been sold as the panacea. While they may be the right choice in a few cases, such as my cattle ranching friends, or even in the oil fields—which are one of the single biggest industrial users of solar power, many individual locales may be better served by coal, or natural gas, even nuclear, than by renewable power. But the mandates, or the EPA, have not taken that into consideration.
In New Mexico, there are two coal-fueled power plants situated, virtually, at the mouth of the coal mine. The coal is extracted and sent via conveyor belt straight to the power plants that generate most of New Mexico’s power and provide enough excess to sell to neighboring Arizona and California. But EPA regulations require that these plants, with years of useful service left, be shut down. Some of the units will be converted to natural gas—something the region also has in abundance. However, the natural gas has pipelines that can take it to the world markets; it is not stranded the in the San Juan Basin.
In contrast, the coal cannot conveniently leave the area—there is no rail to transport it. Looking at the specifics of the basin, it makes sense to continue to generate electricity from coal and allow the natural gas to benefit markets (perhaps even our allies) without other resources—but the EPA and its environmental advocates will hear nothing of it. Their ideology drives the policy whether it makes economic, or practical, sense or not.
The author of Energy Freedom, Marita Noon serves as the executive director for Energy Makes America Great Inc. and the companion educational organization, the Citizens’ Alliance for Responsible Energy (CARE). She hosts a weekly radio program: America’s Voice for Energy—which expands on the content of her weekly column.
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