Posted on 12/17/2013 5:56:01 AM PST by Shout Bits
The price of oil is basically the same the world over. This is because fleets of ships and miles of pipelines transport oil from where it is plentiful to where it is needed (although a Carter era law bans the export of US oil). The only difference in oil price is due to its varying quality and the cost to transport it. Not so for natural gas. In the US, gas costs around $4 per MMBtu (million BTU, about a million cubic feet). In England, the price is $8, and in Japan, the price is $16. Why wouldn't someone liquefy US gas, ship it to Japan and sell it for a profit? Of course because the government basically outlaws the practice.
The DOE and other authorities do authorize limited gas exports, but they are nowhere near enough to right the world pricing imbalance. Why should exports ever be limited, especially considering the US's notorious trade deficit? Politics as usual.
Leftist politicians like Sen. Robert Menendez (NJ) want to outlaw the exportation of all energy. While saying they want the oil and gas to benefit the US, they really want control over the factors of production (hint: that is communism). Contrary to Menendez's caucus, a free market sends efficient signals to energy producers and consumers. Banning trade has two inevitable results – wealth destruction and war.
The Obama administration is basically outlawing coal electricity, and contrary to enviro hype, the only technology capable of picking up the slack of the many retiring coal plants is gas. Wind and solar are pleasant fairy tales, but when renewable mandates hit the pavement, they are paid for with gas.
Outlawing coal, as is surely going to happen in June, can only work if gas is cheap, really cheap. Coal is a stable cost input for electricity, while gas has until recently been volatile. Enviros are in the tricky position of hating coal, hating fracking, hating drilling, and somehow often blaming everyone but themselves when energy prices spike.
If gas exports were unlimited, as the export of any civilian private property should be, foreign gas prices would fall more than US prices would rise, but US gas could rise perhaps 50%. If so, electricity would increase by about 30% depending on the simultaneous shutdown of coal plants. However, lifting of the de facto drilling ban on federal land and various fracking bans around the US would counter these pressures.
Even if the climate is warming, and the evidence is mixed, climate change should not be a religion wherein supplicants must accept the whole nut of enviro orthodoxy. There is no reason to believe outlawing US coal is going to stop or even slow global warming, and there certainly is no reason to believe the cost of outlawing coal is worth any environmental benefits. The only way to stop global warming within the largely artificial enviro construct is to keep China and the developing world in abject poverty.
So, let the gas loose on the world. Let electricity prices explode due to radical environmental policies such as drilling bans, fracking bans, and coal bans. Expose the folly of claims that wind and solar can replace coal. Force a complacent public to realize coal is a pillar of the US economy, and return environmental concerns to their proper framework, which is a balance between cost and benefit. Leftist enviros have lured many people into fool's paradise wherein there are no costs or consequences to radical policies. It is time to grow up.
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In other words, blow up our economy, then say "I told you so." No thanks.
It is time to stop listening to their constant refrain of, “The sky is falling!” (Unless we restrain personal liberty and tax people out of existence).
- Peak oil
- Globull warming
- Over population
- We're running out of water
- Paper grocery bags are killing forests, we all must use plastic bags. No wait, plastic bags are evil, we all must use disease carrying cloth grocery bags.
- Acid rain is going to kill everyone
- Alar on apples is going to kill humanity
- The Polar ice caps are melting, er wait, they're expanding.
- Everybody (except AlGore) must use only one square of toilet paper to save the planet!
It's time to laugh these dolts out of the public square.
I don’t think we have a handle on how much gas is being bottled up by infrastructure requirements. After wells are drilled, they still have to be fracked. Then they have to connected to the collection and transmission network and the wet components are stripped. Coming electrical generation use alone will move prices upward.
Exporting natural gas has the potential to undercut world oil prices.
There’s a reason the Saudis are worried about our gargantuan supplies of natural gas. The one thing you can count on is greed. Natural gas producers have almost bankrupted themselves trying to tie up leases. When the price goes up they’ll do what any other industry does. Overbuild capacity and supply driving prices back down.
Between gas industry greed and the Saudis’ concerns we need to open the export valve wide open.
Yo-Yo:
You seem to think anybody has the right to tell the owners of gas they cannot export it. It is private property.
....and DDT kills all the birds.
Sure hope my brother-in-law doesn’t see this headline.
DPMD:
That was the joke. I think this new puppy I am raising is driving me crazy.
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