Yesterday, I had the...uh, I was going to say "pleasure" but that wouldn't quite be the right word...opportunity (?) to join a blogger conference call with T. Boone Pickens. It was an interesting mix of bloggers on the call, from both right and left. Here is a link to a recording of the call.
First, let me just say that I'm very happy to see a right-wing (gave $3 million to the Swift Boaters against Kerry in 2004) oil guy like T. Boone Pickens spending a chunk of his money to help raise awareness of how we can get off our "oil addiction." I love the fact that he believes we can't "drill baby drill" our way out of this problem (although he's not particularly against drilling for environmental reasons). I also like the Pickens Plan's emphasis on developing wind and solar power, as well as a transmission grid to get that power from where it's produced to where it's needed. That's all well and good.
However...you know there was a however coming. :) Unfortunately, there's a MAJOR problem with the Picken's Plan, but if you aren't familiar with the relevant numbers, you won't realize it. Pickens says we should replace oil used in transportation (e.g, gasoline and diesel) with natural gas. True, natural gas is cleaner than oil and has a lower carbon content. But here's the problem: according to the US Energy Information Administration (EIA), the United States contains just THREE PERCENT of proven world natural gas reserves (211 Tcf out of 6,257.8 Tcf), yet consumes TWENTY ONE PERCENT (23 Tcf out of about 105 Tcf). Even if you add in Canadian and Mexican gas, we're still only up to 4.5 percent of world natural gas reserves. Yet T. Boone Pickens is talking about significantly increasing U.S. natural gas consumption in years to come, specifically to fuel our automobile fleet.
So, if there's not enough natural gas in North America (and there definitely isn't, at least not PROVEN reserves), where would we get all this natural gas?
I asked Pickens about this yesterday on the call, and first off he sounded shocked at the numbers, despite the fact that I was reading right off the EIA website. He started rambling about potential natural gas fields that might be explored and exploited. But those are not PROVEN natural gas reserves, they're just hypothetical, and certainly nothing to base a major energy plan on. That's a huge problem, pretty much a complete non-starter to the natural gas portion of the Pickens Plan.
By the way, for T. Boone Pickens' edification (since he doesn't seem to be familiar with the numbers), here are the countries with the largest proven natural gas reserves in the world (all from the respected Oil and Gas Journal).
1. Russia: 1,680 Tcf
2. Iran: 948 Tcf
3. Qatar: 905 Tcf
4. Saudi Arabia: 253 Tcf
5. UAE: 214 Tcf
6. United States: 211 Tcf
7. Nigeria: 184 Tcf
8. Venezuela: 166 Tcf
That's right, world natural gas reserves are located in pretty much the same exact countries as the ones that currently have us over the barrel for oil: Putin's Russia, Ahmedinejad's Iran, our pals in Saudi, Hugo Chavez's Venezuela, etc. Unfortunately, if T. Boone Pickens gets his way on the natural gas portion of his plan, we will not only be addicted to OIL from these countries, but to NATURAL GAS as well. Just imagine, oil tankers AND liquefied natural gas tankers making their way down the Persian Gulf and through the Strait of Hormuz on their way (hopefully) to market. Does that thought, the idea of adding even MORE reliance on the same "countries that hate us," give you a warm and fuzzy feeling? No, I didn't think so.
But wait, there's more! Once that LNG gets to the United States, it has to be re-gasified at receiving terminals which nobody wants built in their backyards, or anywhere near their backyards. That is, even if the economics of LNG made sense, which they most likely don't. So much for that idea.
In sum, T. Boone Pickens' plan sounds great, but only if you don't look at the numbers and realize that they don't add up. Once you've done that, you quickly see Pickens' plan vanish into the air like a natural gas flare in the desert...
The Subject line is from Hamlet Act 5, scene 2, 280-283.
Oh, and perhaps these words from Hamlet might apply to the debate tonight? :)
"The play's the thing,
Wherein I'll catch the conscience of the king."
I also thought what Pickens wanted to do was to displace natural gas in power generation. Less natural gas power plants would mean you would have more for transportation uses. And the beauty of CNG is that you already have natural gas distribution systems in place in many parts of the country.
As far as LNG we still aren't a major player in global markets. And as I recall, we get most of what we do import from Trinidad (PetroTrin). As far as nimbys, were there a lot of complaints when Dominion just recently got it's Cove Point expansion approved? Also, FERC has siting authority for LNG terminals; so, I doubt the NIMBYs would get a lot of traction in stopping anything.
Notes and Sources
1 Proved reserves are estimated quantities that analysis of geologic and engineering data demonstrates with reasonable certainty are recoverable under existing economic and operating conditions.
2 BP p.l.c., BP Statistical Review of World Energy June 2008, except United States. Oil includes crude oil, gas condensate, and natural gas liquids. United States oil data, including both crude oil and natural gas liquids, and United States natural gas data are from the Energy Information Administration, U.S. Crude Oil, Natural Gas, and Natural Gas Liquids Reserves, 2006 Annual Report, DOE/EIA-0216(2007) (November 2007). BP notes that for oil its "Canadian proved reserves include an official estimate of 21.0 billion barrels for oil sands 'under active development'." BP does not include but separately reports an additional 152.2 billion barrels of Canadian oil sands defined as "'remaining establised reserves', less reserves 'under active development'." BP says of its data sources for oil reserves that "the estimates in this table have been compiled using a combination of primary official sources, third-party data from the OPEC Secretariat, World Oil, Oil & Gas Journal and an independent estimate of Russian reserves based on information in the public domain." Likewise for natural gas reserves, BP states that "the estimates in this table have been compiled using a combination of primary official sources and third-party data from Cedigaz."
3 PennWell Corporation, Oil & Gas Journal, Vol. 105.48 (December 24, 2007), except United States. Oil includes crude oil and condensate. Data for the United States are from the Energy Information Administration, U.S. Crude Oil, Natural Gas, and Natural Gas Liquids Reserves, 2006 Annual Report, DOE/EIA-0216(2007) (November 2007). Oil & Gas Journal's oil reserve estimate for Canada includes 5.392 billion barrels of conventional crude oil and condensate reserves and 173.2 billion barrels of oil sands reserves.
4 Gulf Publishing Co., World Oil, Vol. 228, No.9 (September 2007), except United States. Oil includes crude oil and condensate but excludes natural gas liquids. Data for the United States are from the Energy Information Administration, U.S. Crude Oil, Natural Gas, and Natural Gas Liquids Reserves, 2006 Annual Report, DOE/EIA-0216(2007) (November 2007). World Oil states that its Canadian oil reserves estimate "includes reserves that are recoverable with current technology and under present economic conditions." It includes 20.665 billion barrels of oil sands and bitumen. It excludes another 153 billion barrels of oil sands and bitumen claimed by Canadian authorities.
5 Centre International d'Information sur le Gaz Naturel et tous Hydrocarbures Gazeux (CEDIGAZ), Natural Gas in the World, End of July 2008 (Electronic Database), except United States. Data converted from cubic meters to cubic feet at 35.315 cubic feet per cubic meter. United States data are from the Energy Information Administration, U.S. Crude Oil, Natural Gas, and Natural Gas Liquids Reserves, 2006 Annual Report, DOE/EIA-0216(2007) (November 2007).
6 Reserve estimates for Kuwait and Saudi Arabia include one-half of the reserves in the Neutral Zone, if separately reported.
Sum of components may not equal total due to independent rounding.
As to Cove Point, this is interesting:
...Yes, there is an LNG terminal there. Yes, it is expanding and yes, there are nearby homes. The Google Maps link makes this very clear. But the area is still much less heavily populated than Sparrows and vicinity. And the Cove Point terminal has been there since 1972. So I assume many of these homes were built and bought in the knowledge that the LNG plant and the risks were there. That's different from bringing a terminal into an already-populated areas.
2. Power generation can move to renewables and offset CNG consumption for cars - 99% of current gas use is for power generation (22% of total energy production) and wind alone is poised to supplant much of that in ten years.
3. Development of CNG technology is part of overall energy production, distribution, and transportation technology development, which can incidentally be exported to other countries
4. Imported LNG is not required for the numbers to add up
Again, just want the plan to be accurately presented. We can only debate the merits once we agree what is and is not being proposed.
I don't see why you couldn't use hyrbid vehicles that use CNG. Then you have CNG to help further reduce oil consumption during our transition to green energy. You could fairly easily equip homes to just pull the gas right through your residential meter and save you a trip to a station. And natural gas doesn't require dirty storage tanks leaking underneath the concrete of gas stations.
And also from EIA's own analysis:
Total U.S. proved natural gas reserves - resources that have been identified and tested and either have been or will be developed - have increased for the last eight years, and in 10 of the last 11 years. Recent drilling trends indicate continued growth, with a stronger concentration on unconventional resources like shales.Shale formations in the lower 48 States are widely distributed, large, and contain huge resources of natural gas. They are just starting their full development. Already, the production from just one Barnett Shale field in Texas contributes more than 6% of production from the lower 48 States, which is more than from the large producing State of Louisiana.