Tag Archives: President Obama

President Obama seeks new energy path but fails to recognize what the path is made of

In his State of the Union address, President Obama outlined his plans for a clean energy strategy to meet environmental goals.

I have often stated here on HRN, that we all can agree on a clean energy future, but the facts are that the road to get there is paved in carbon energy, and natural resources – more specifically rare earth elements.

Wind turbines, solar panels etc. are dependent on rare earth elements that are indispensible in nearly all clean energy products and technologies. Without these rare earth elements, clean technologies are non-existant. To get these elements, takes a huge amount of energy to mine, extract and refine. Heavy diesel equipment, huge energy hungry processing facilities, chemicals etc. its an energy intensive process. Then there is the process to build, manufacture, transport and assemble these cleantech products which also takes a huge amount of energy.

President Obama’s plan is to drop tax credits to oil and gas companies and pass this along to the cleantech sector. Is that really going to acheive anything? No. Those lost tax credits will increase costs that are passed along to consumers – you and me – AND the cleantech companies through increased costs in the energy used to build the cleantech industry. Its stupid.

Istead, we should recognize that to build the “green economy” it takes a lot of current energy from reliable sources. However, there is one source – natural gas – that provides a affordable, lower carbon source of energy and its abundent throughout North America. However, in their wisdom what is really happening with natural gas? Its going to be shipped to Asia where they are smart enough to recognize their energy needs, and smart enought to use natural gas to full extend of its value. Oh, and they are likely to be the biggest manufacturers of wind turbines, solar cells and other cleantech products as well. The US will be twice beaten.

The way things are going it might just play out that the US stays dependent on oil, sells their domestic lower carb natural gas to China, and loses the innovation and manufacturing market for cleantech products to China as well.

Obama got one thing right, China is moving forward and fast. Their graduating millions of students a year in sciences and engineering. They are investing heavily in cleantech and high tech, and securing the energy sources and resources that it takes to build the products in these sectors.

Its getting to the point that the inability of the US politicians on both sides to get something done is determining the outcome of the game before its finished. The race has started, China’s up and runng and the US politicians are still trying to determine where they should put their starting block down. Stop it! Drop the block and get moving.

I know what some are saying… shale gas is environmenttaly damaging. That the hydraulic fracturing process poisons the water basin. The risk of this is low, but the industry listened. The great thing about capitalizm is that it rewards those that provide solutions to problems. If you have a solution to improve something. Your going to do very well for yourself, your family and your shareholders.  Point here is that the answer is not to shut something down when there is a problem and debate about it… the right thing to do is to develop a solution to solve the problem.

Oh, and in the case of hydraulic fracturing… take a look at Gas Frac Energy Services. A Canadian company based in Calgary, Alberta. They have a new fracking process that virtually elliminates the environmental risks that have everyone in New York upset. They took advantage of the situation, provided a solution, and are reaping the rewards.

China and India are really living the “American Dream”. They are living in hope. Hope for their future and recognizing that the problems around them provide opportunity. Opportunity innovate and create solutions to improve their lives. Their getting educated and taking responsibility for their future. They are building new energy sources in wind, solar, nuclear etc to meet their future needs in a green economy. They are shutting down environmentally damaging mines, and factories, and securing resources from around the world. And they are buying lots of natural gas. They are using is in transportation and power generation. Is filling a natural gas powered car inconient in China? No. They built the fill stations and made it convenient. Natural gas is at nearly every petro station in major cities. Meanwhile, as Canada and the US, still debate about natural gas as a via transporation fuel, natural gas producers pipeline companies are building pipelines and facilities to export natural gas to Asia – more specifically China – from Kitimat BC, and Louisiana.

The HornRiverNews has tried to get the message out. The abundance of natural gas in North America is not a problem carbon fuel. Its an opportunity. An opportunity to help in lower carbon emissions on the path to a cleaner energy future.


Top Obama economic adviser notes importance of natural gas

Top Obama economic adviser, Lawrence Summers

In a speech to energy industry elite, top White House economic adviser Lawrence Summers,  discussed the importance of a comprehensive energy legislation that will encourage investment, reduce greenhouse gas emissions and reduce America’s dependence on foreign oil. s

During his address, Mr. Summers acknowledged the important role natural gas should play,  and commenting “the remarkable opportunities created by all the natural gas we didn’t know we had five years ago.”

There is an abundance of natural gas in North America brought about by shale gas discoveries. It will take time, but both the U.S. and Canada must encourage increased usage of natural gas in electricity generation, and transportation in an effort to reduce carbon emissions. It is quite alarming that there are only about 11,500 natural gas vehicles in Canada, and around 150,000 in the U.S., while countries like Brazil have over 1.5 MM. There is no compelling reason why natural gas could not be used more in transportation. The first and likely target are fleet vehicles with central filling stations and lots.

Mr. Summers also stated that future energy policy must include a price on carbon emissions, but did not specifically mention cap and trade. A price on carbon could work if it is calculated equally among fuel sources and does not provide special treatment or credits for any single source and provide an unfair carbon comparison.

Houston Chronicle: Obama adviser calls for energy diversity

Is Obama looking to end shale gas drilling in the US?

President Barack Obama

As the U.S. Congress begins an investigation to explore the environmental impact and risks associated with hydraulic fracturing – or “fracking” – of shale gas formations, growing concerns that the administration will put some sort of moratorium on shale gas drilling.

Will President Obama side with Waxman and call for a drilling ban for natural gas? Where would that leave the U.S. or for that matter, the opportunity to use natural gas to reduce carbon emissions and reduce U.S. dependence on foreign oil supplied by countries that are basically enemies of the U.S. The stakes here are huge, and given the falling approval ratings of Obama how can the president afford to risk such a great opportunity. The one thing we know for sure is that going back to the way things use to be done is not sustainable. In the case of the U.S. they must find a practical way to reduce their dependence on foreign oil from states that hate them, and they – like every country – also needs near immediate  and practical means for reducing carbon emission through proven resources. The massive amount of natural gas that has been unlocked from shale resources in North America provides this solution.

However, many have raised concerns that Obama may just place a all out ban on shale gas while the congressional committee conducts there investigation or puts regulation into place that will make the drilling process for shale gas economically unfeasible. In his article, Obama’s Determined to Derail Nat Gas, Real Money Columnist, Jim Cramer, states:

The single biggest detriment to natural gas as a bridge fuel remains the president of the United States, and the only question I have is whether he will put a moratorium on further drilling until the EPA can launch a multiyear study of the hazards of natural gas drilling to the nation’s water supply. That will allow nuclear and clean coal to catch up to the fuel’s use and keep the focus on anti-carbons or sequestration.

I have never seen anything like this. This president is determined to frustrate natural gas.

It is very important to point out that the U.S. Congressional investigation is based on a few isolated incidents of concern – see HRN “U.S. Congress to investigate shale gas “fracking” process”. Calmer heads need to prevail here, and it is important to focus on the fact that technology has and will continue to improve and do so with minimal environmental impact. Successful solution always evolve and improve. Its what makes commerce work.

If Obama does ban shale gas drilling (not likely, some form of regulation is more likely which may prove to be just as disastrous for the U.S. natural gas  industry and economy) the economic and geopolitical opportunities and impact are significant and far reaching.

First, the shale gas boom in North America has been made possible because of technology development in horizontal drilling and fracking. Like any technology it has been improved over a number of years, and continues to be improved. Today, the technology has reached some point of standardization whereby others are also able to incorporate it into their drilling processes and it is being exported and used in other markets. It is only a matter of another year or so when we will start to hear about massive shale gas plays being discovered in other countries providing cleaner domestic natural gas resources to those countries. HRN has discussed how these new discoveries will have significant geopolitical impact. Specifically in the EU where new supplies of natural gas within the EU will reduce the political clout that Russia uses as a tool to influence the eastern EU. A reduction in this Russian influence should not go unnoticed by the U.S.

However, it is the economic impact – or perhaps lost opportunity – that should be of greater concern to the U.S. Last year nearly $265 Billion left the U.S. economy to purchase foreign oil. This unsustainable dependence on foreign energy and massive export of capital is simply the key point behind T. Boone Pickens’ Plan. This critical problem is magnified when the price of oil increases, and all indications are that prices will appreciate over the long term. Cheap oil energy is a thing of the past. New energy sources from renewable technologies like solar, wind, geothermal etc are required. But all these sources require energy to build, and that energy comes from fossil fuels. What the U.S. and others need to consider, is using the cleanest fossil fuel available… and that is natural gas. By increasing the amount of natural gas used in the overall energy mix, and reducing oil and coal, Canada and the U.S. will reduce carbon emissions while meeting their energy needs from domestically available resources.

“Another year went by, another $265 billion siphoned out of America’s struggling economy, and we still haven’t adopted a real energy plan to reduce our dependence on foreign oil”. –  T. Boone Pickens.

For the most part, T. Boone Pickens  is pleased with the support that Obama has provided him and his Pickens’ Plan. According to recent quote in U.S. Today Mr. Pickens stated a press conference at the National Automobile Dealers Association meeting in Orlando “They haven’t done anything but support me”. Mr. Pickens believes the legislation he is driving  to offer $65,000 tax incentives for conversion of 8 million 18-wheel long-haul trucks from diesel fuel to natural gas, has a good chance of bipartisan support in Congress. He also believes truck-st0p operators will be willing to invest $1.5 million or more per station to install natural-gas fueling equipment. But the Pickens’ Plan will not work without shale gas production.

While a ban on shale gas drilling in the U.S. would have huge negative implications for the natural gas industry there it would certainly lead to a economic boom in Canada’s natural gas industry – especially in Alberta – where drilling activity is down considerably. A U.S. ban would dramatically increase U.S. imports of natural gas and Canada is the largest exporter of natural gas to the U.S.

One of the key factors in fracking is the shale’s thickness. In areas where the formation is thick there is a greater opportunity to provide a buffer of rock that contains the cracking fluids within the formation. Fortunately, the Horn River basin enjoys a very thick shale formation that is up to 75 meters thick in parts.  In addition, shale gas drilling in Canada was completed with the benefit of the more advanced technologies.

Shale gas represents a global opportunity to reduce carbon emissions and provide a bridge fuel. The industry should be supported, technology should be improved (and history dictates that it will be), and North America should move forward with using cleaner natural gas as a bridge fuel to reduce carbon emissions and become more self sustaining with meeting their energy needs. Shale gas has provided a game-changing opportunity to meet these objectives.

The Street.com: Obama’s Determined to Derail Nat Gas

Obama announces shale gas initiative with China

Chinese President Hu Jintao (L) shakes hands with U.S. President Barack Obama (London April 1, 2009. Xinhua/Ju Peng)

President Obama and President Hu Jintao recently announced a broad agreement to strengthen cooperation between the United States and China on clean energy including a shale gas initiative that states:

Shale Gas Initiative. The two Presidents announced the launch of a new U.S.-China Shale Gas Resource Initiative.  Under the Initiative, the U.S. and China will use experience gained in the United States to assess China’s shale gas potential, promote environmentally-sustainable development of shale gas resources, conduct joint technical studies to accelerate development of shale gas resources in China, and promote shale gas investment in China through the U.S.-China Oil and Gas Industry Forum, study tours, and workshops.

New technology, and techniques in fracturing and horizontal drilling  have made it economically feasible to unlock natural gas from tight shale rock formations. In the U.S. natural gas reserves as increased by approximately 40%, and in Canada,  some  estimates have more then doubled natural gas reserves in Canada. The global impact of shale gas could have far reaching economic, and geopolitical implications.

In the U.S. law makers are currently considering the Natural Gas Act that will increase incentives to use natural gas more in the U.S. transportation network, and power generation. Natural gas is emits 50% less carbon then coal and approximately 30% less then diesel and gasoline. For the U.S., by using more natural gas they can reduce carbon emissions but also leverage domestic supply and supply from Canada thereby reducing their consumption of foreign oil from countries that do not share political interests with the U.S.

A breakthrough in Chinese domestic natural gas reserves could have profound impact on that countries growing need for energy, and displace some coal power generation. China needs all the technical and real world experience the world can offer, and Canadian companies should take initiative to develop this opportunity with China and other nations by co-development and technology sharing. On the government level, future trade missions should include a shale gas / clean energy component.

At the same time, as the U.S. increases domestic natural gas consumption and production, Canada needs to increase the use of natural gas in the Canadian transportation grid and power generation. Even with  an increased domestic consumption, Canada would have a surplus of natural gas available for international export via a planned LNG plant in Kitimat, British Columbia. Despite low natural gas prices, the opportunity in natural gas going forward is very bright and will help reduce carbon emissions as a bridge fuel towards a renewable clean energy future.

White House Press Release: U.S. – China Clean Energy Announcements

More tax incentives for natural gas vehicles in United States

Ford Fiesta CNG, only in Europe you say?

Ford Fiesta CNG, only in Europe you say? Pitty

Today, US Senate Majority Leader Harry Reid of Nevada will introduce legislation that would double the size of tax credits for buying vehicles fueled by natural gas.  Mr. Reid will join Mr. T. Boone Pickens in a press conference today supporting the proposed tax credits. Under the proposed legislation, the credits which cover 80 percent of the added cost to buy natural gas-fueled vehicles over conventional automobiles, would jump to as high as $12,500 for passenger cars and light trucks and as much as $64,000 for higher weight-class vehicles. If President Obama is serious about reducing carbon emissions he will fully support the legislation.

Canada needs to get on board here. Every country in the world is moving fast towards incorporating more natural gas into their transportation network in order to reduce carbon emissions and increase fuel efficiencies.  Canada is seriously lagging behind and taking advantage of the massive amounts of shale gas that are deposited in Canada to make substantial reductions in carbon emissions in the most practical way available today.

In Canada, the CNG market has been relegated to after market kits and providing rebate incentives to have existing vehicles converted over to CNG. However, complaints rolled in when providers and installers of CNG kits simply increased their rates by an amount equal to the rebates, making the CNG conversion program a complete failure.

And while auto makers produce CNG vehicles for sale around the world where CNG vehicles have quadrupled in the past five years to over 10 million vehicles worldwide , there are no natural gas vehicles available for sale in Canada. General Motors,  Ford, Honda, Volkswagen, Mercedes and others all sell CNG vehicles outside Canada. Manufacturers in North America are scrambling to meet demand for alternative fuel vehicles – an opportunity they completed screwed up over the last few years choosing to sell gas guzzling SUVs etc. Still there no known plans for CNG.

A obvious start would be to have all government fleet vehicles on natural gas. AT&T is leading the way in the US with plans to convert nearly 8000 vehicles; half of public buses in California are on natural gas with natural gas playing a major role in the state’s plans to reduce carbon emissions. In BC we enjoy the odd “test bus” drive by promoting how it is running natural gas or hydrogen.

And the key to moving forward with reducing carbon emissions is through incentives, not penalties. On July 1st, British Columbia’s carbon tax on gasoline  increased to 3.6 cents per litre from 2.4 cents. The BC government says it created the “revenue-neutral” surcharge in part to create awareness and  prompt individuals and businesses to question their reliance on carbon spewing conventional fuels.  Does anyone seriously believe a 3.6 cent tax onto gasoline has changed driving habits in BC? No. Did the average consumer eve notice the increase at the pump that jumps up and down 5 cents a day? No.

The time is now for governments in Canada to encourage consumers and businesses to start using natural gas as their fuel of choice for transportation by off setting the increased cost of purchasing a CNG based vehicle. And auto companies in Canada need to start offering the same factory direct CNG vehicles that are offered elsewhere in the world.

(Oh, one reason they say they can’t offer some of the CNG cars offered internationally is because of the higher safety standards in Canada (ie. crash testing)… higher safety standards that were necessary because of the increasing numbers of heavy SUVs crowding our streets and smashing into smaller cars… thanks again).

Recent massive reserve discoveries in British Columbia’s Horn River and Montney basin have dramatically changed the Canadian energy industry. We need to support investment into this valuable resource, encourage exploration development and distribution increasing local consumption while nurturing new international customers in Asia. Natural gas is abundant, affordable and clean and is simply the most practical solution for reducing carbon emissions.

Bloomberg: Tax Credit for Natural-gas Fueled Cars May be Doubled, Extended

Devon Energy President talks oilsands, Obama, natural gas on BNN

John Richels, President of Devon Energy, spoke to BNN today about President Obama’s softening tone on Alberta’s oil sands, and the key role natural gas plays in North America meeting their energy needs while reducing carbon emissions. You can watch the entire BNN interview here: http://tr.im/p60h

Has Obama put Canada’s next energy boom into motion! Go Obama Go!

obamaDear President Obama;

Thank you for your recent announcement to increase royalties on oil and gas exploration and development in the United States. Though I dont quite understand your logic given your stated objective to rid the USA of oil from unfriendly countries.

Hope you enjoyed your recent visit with Prime Minister Stephen Harper. Though you were unable to spend a lot of time here in Canada, it was encouraging to hear you say “I love this country (Canada)”. What’s not to love? Canadians are incredibly friendly, and easy going. In addition to their innovative creativity human resources, Canada is full of natural resources. Specifically, oil and natural gas.

We understand the environmental challenge of producing oil from the oil sands. Much like your massive reserves of coal in the United State, more investment is required into carbon capturing. (Oh, thanks for acknowledging that US coal is just as big of a environmental problem as US coal).

Both the USA, and Canada are sitting on a massive amount of shale gas. One of the largest shale plays in North America is the Horn River basin in northeast British Columbia By making the necessary investments so we can bring these massive resource to market, both the USA, and Canada would benefit from a secure energy source from friendly Canadians that provides both economic and environmental benefits. (If you have not already, Mr. President, you should really meet with T-Boone Pickens and look at his plan). North America can become energy independent together.

Dear US Exploration Companies;
Canada is open for business. There are 69 trillion cubic feet of shale gas to be extracted with great royalty schemes. In fact in BC, Premier Gordon Campbell recently introduced more incentives as part of a new royalty plan for oil and gas sector.

Excellent opportunities in Alberta too but, less favorable royalty schemes in Alberta so focus on the Alberta’s oil sands.

Think BC for unconventional shale gas, and think Alberta for unconventional oil sand (until BC starts drilling offshore – then think BC for oil too!!)

Dear American Investors;

Canada is open for business. British Columbia has massive natural gas reserves waiting to be exploited. Alberta has more oil then Saudi Arabia. Excellent investment opportunities to invest in British Columbia and Alberta’s resources. We’re still accepting US dollars!

See Financial Post: Obama Targets US Oil