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On Is it Time to Broaden the Scope of the U.S. Renewable Fuel Standard?

Please provide reliable estimates for the eroei and unit cost of cellulosic bio-ethanol production, using current technology.

March 24, 2015    View Comment    

On Washington Post: President Obama is Lying About the Keystone Pipeline

Even if blocking the KXL pipeline were to restrict development of the Alberta tar sands (it doesn't), it would not reduce global oil consumption.  It would simply induce increased production from places like Venezuela, Iran, and Russia.

Also, please explain why it is greedy for an oil producer to make a profit by producing oil, but not greedy for a railroad to make a profit by transporting that same oil.

Finally, please explain how transporting oil by diesel trains rather than by pipeline reduces oil consumption.

 

March 10, 2015    View Comment    

On Washington Post: President Obama is Lying About the Keystone Pipeline

Very noble.  So consume zero oil, including the petrochemicals without which the global economy would collapse, and the world would be consumed by famine and disease.

 Zero.

 (By the way, the administration has already proved itself untrustworty to the world by supporting the renewable fuels standard.)

March 9, 2015    View Comment    

On Stranded Assets in Oil and Gas a Reality

Just as your article reminded me of a quote attributed to Disraeli, so your rebuttal reminds me of a quote attributed to Churchill: "From time to time it is worthwhile to consider the obvious."

Here's what is obvious: The profitability of producing a commodity is highly dependent on the selling price of the commodity.  I won't get drawn into a point-by-point rebuttal of your arguments, as they are secondary to that central point.  I will simply allow your implicit assertion that price is not critical to profitability to speak for itself.

 

March 8, 2015    View Comment    

On Stranded Assets in Oil and Gas a Reality

I have noticed a few articles recently that cite financial results over a selected period of time to suggest that renewables are making great progress in replacing fossil fuels, and to dismiss the financial value of the shale revolution.  This argument reminds me of the famous quote often attributed to Benjamin Disraeli: "There are three kinds of lies: lies, damned lies, and statistics."

Financial results over a limited period of time can be used to support just about any thesis.  For example, consider the performance of the share price of Tesla, the only pure electric car manufacturer of any consequence in the world. Tesla's stock closed on March 6 at about 194. This is astounding when one considers that the closing price of Tesla was 39 two years ago, and suggests that Tesla, and electric cars generally, are poised to dominate the global automobile industry.  However, it should also be noted that Tesla closed at 286 last September, and has lost a third of its value in 6 months.  This could be interpreted to suggest that Tesla is on the verge of collapse, and that electric cars will only be niche vehicles in the global market. 

Which view, if either, is correct?  I have no idea, but I do know that selective citation of recent financial returns is a terrible way to predict the future.

Other examples of the danger of inferring long term trends from short term data are the frenzied dotcom boom of the late 1990's, and the subsequent residential real estate boom.  Both of these were driven by speculation, not a consideration of the magnitude of underlying wealth creation.

This brings me to the two factors that disturb me about this article: the lack of discussion of the reason for the poor financial returns associated with shale production, and the lack of understanding of wealth creation.

The reason that recent financial returns in the shale production industry is the sharp decrease in the price of oil and gas that was a direct consequence of the technical success of the development of shale production technology.  It is the cruel irony for extractive industries that their reward for technical success is often their financial destruction.

The wealth created by the shale revolution is staggering.  The U.S. consumed about 7 billion barrels of oil and 26 trillion cubic feet of natural gas in 2014.  I conservatively estimate that shale production in the U.S. has caused the price of oil to be at least $20 per barrel and the price of natural gas to be at least $3 per thousand cubic feet lower than they would have been without shale production.  (These are "seat of the pants" estimates.  If somebody has more reliable numbers, please let me know.)  This equates to a savings to U.S. consumers of about $220 billion per year.  This does not include royalty payments to property owners, local state and federal tax revenue, and job creation through the reshoring of manufacturing and chemical production.  The article makes no mention of this.

It is enjoyable to speculate on the future of various energy sources, but the speculations are probably of no more value than preseason ranking of football teams.  They're fun to talk about, but ultimately you have to wait until the games are played to learn who wins.

March 7, 2015    View Comment    

On Energy Quote of the Day: 'Lord, Grant Me One More Boom and I Promise Not to Screw it Up'

The quote we should be hearing from the political leadership of the U.S.: "Lord, grant me one more oil glut, and I promise not to screw it up."

December 22, 2014    View Comment    

On Christmas and Carbon: What's The Connection?

"A huge chunk of the deforestation is to cater to the demands of the paper manufacturing industry."

Reference?

December 21, 2014    View Comment    

On Is Cellulosic Ethanol All it’s Cracked Up to Be?

"DUDE! ETHANOL IS CHEAPER THEN GASOLINE!!"

Gasoline has an energy content of 114,000 btu / gallon, and currently wholesales for $1.58 / gallon, or $13.86 / mmbtu.  Ethanol has an energy content of 76,000 btu / gallon, and currently wholesales for $1.66 / gallon, or $21.84 / mmbtu.   (http://en.wikipedia.org/wiki/Gasoline_gallon_equivalent http://www.eia.gov/todayinenergy/prices.cfm)

In other words, ethanol is currently 1.58 times more expensive than gasoline on an energy equivalent basis, even though corn and ethanol prices are at historically very low levels. In fact, corn ethanol and cellulosic ethanol have never in history been less expensive than gasoline.

As to your suggestion that the drop in ethanol prices caused the recent sharp drop in oil prices, the net energy yield of corn ethanol production is the energy equivalent of about 300,000 barrels of oil per day, or less than 10% of oil production from fracking in the U.S., and about one third of 1% of global oil consumption.  The impact of corn ethanol production on oil price is insignificant, and is far more than offset by increased food prices.

Finally, as to your claim that cellulosic ethanol is starting to come online, I challenge you to produce a reliable reference stating the cost and eroei of cellulosic ethanol production.

December 16, 2014    View Comment    

On Big Banks Propping Up Coal Industry to the Tune of $89 Billion

Justin,

If you are as passionately opposed to coal as your rhetoric suggests, you could start reducing its use by leaving the Sierra Club and supporting nuclear energy.  Otherwise, you are embracing codemning billions of people to abject poverty or even genocide through malnutrition or the spread of preventable disease.

Of course, the victims of eliminating coal without greatly expanding nuclear would not live in affluent places such as San Francisco, so maybe you don't much care.

December 14, 2014    View Comment    

On This Map Explains Why the Ivanpah Solar Plant Is Performing Worse Than Expected

Unless I'm way off in locating Ivanpah on the map, you are suggesting that a solar irradiance level 2 to 3% lower than average resulted in a production loss of 75%. This makes the excuse "The dog ate my homework" seem brilliant! It also makes Solyndra look like a blue chip investment.
December 10, 2014    View Comment    

On Renewable Natural Gas Helps Reduce Emissions, Policy Support Needed

Edward, I'm all for this in concept, but two numbers that I rarely see presented with what seem to be great ideas for a low carbon or carbon neutral energy source are unit cost and eroei.  Do you know of any estimates for these?

December 8, 2014    View Comment