A Step in the Right Direction

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When there is good news, I will report it. In our mathematically “challenged” country, when people add 2 and 2 and — finally! — get 4, I will celebrate. I’m just that kind of guy.

To the idiocy of recent American energy policy — to the extent we have ever had one — I have devoted considerable attention in these pages. I’ve criticized it under Bush, and even more under Obama, because while Bush’s policy (which was to encourage both fossil fuel and “green energy”) was partly idiotic (the green part), Obama’s (which has been to end fossil fuels and substitute only green energy) has been completely, insanely idiotic.

But the free market, led by entrepreneurs (as opposed to academics, bureaucrats, or other parasites), working primarily on private property (as opposed to public lands, which this administration has locked away), and using private capital (as opposed to taxpayer money), has created a Renaissance of oil and natural gas production.

Even as solar, wind, and biofuel energy has generally proven economically unviable even with massive taxpayer subsidies, the new, unconventional, fossil fuel production — from sources such as shale formations and oil sands deposits, by hydraulic fracturing combined with horizontal drilling — has proven very viable, commercially. It has proven viable, please note, despite a firestorm of new regulations created by the Obama administration, which is eager to choke it off.

That's good news. Here's more.

The symbol of our idiotic energy policy is surely the Chevy Volt, produced by a socialized auto company but poorly received by almost all of society. It has been so poorly received that Government Motors has announced that it is suspending production of the “Sparky Lemon.” Even with massive federal and state subsidies, the whole EV concept has been a flop.

But a recent article in the WSJ reports some good news. A number of car makers are producing cars and trucks that can run on compressed natural gas (CNG), that now inexpensive and clean-burning fuel.

Start with Chrysler. It is announcing plans to build a line of bi-fuel (gas and CNG) powered Ram trucks. And GM is announcing that it will build bi-fuel Chevrolet Silverado and GMC Siena pickups in the fourth quarter of this year.

Honda Motor Company (not being government-run!) is nimbler. It has been selling CNG Civics since 1998 at 200 dealerships spread over 36 states. The starting price for these cars is about $26,600.

Ford, which already for several years has been offering CNG conversion kits for some of its cars, has announced that it will start offering some of its pickups with the option.

CNG-powered vehicles make great sense (as I have argued elsewhere). We can get all the natural gas we need from domestic sources, and it is relatively cheap. Indeed, you can buy conversion kits for any car, and gas compressors for your garage. But it makes most sense if the automakers make the cars powered by CNG right on the factory floor. First, that saves money — pure CNG cars don’t need catalytic converters, for example. And there are economies of scale.

Widespread conversion will take years, because people will move to CNG vehicles only when there is a widespread network of gas stations with CNG pumps. Still, it is a welcome development.

If Obama were sincere when he says, “My administration will take every possible action to develop this energy [natural gas],” he would merit some praise, and I would be happy to supply it. The problem is that in this matter (as in many others), he is lying through his teeth. He has bitterly fought fracking, using every tool in his administration — the Department of the Interior, the SEC, the Department of Energy, and even the Department of Agriculture — while locking away as much public land as he could.

Let’s hope a Republican administration (should we be lucky enough to see it replace the current, benighted one) would truly encourage the transition of vehicles to natural gas, and this country to energy independence. Most of the Republican candidates at least get energy, whatever else they don’t get.




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Comments

Fred Mora

There are many vehicles that use CNG in the European streets, where, due to high taxes, gasoline is very expensive. CNG conversion kits are also available. Some towns have converted whole bus fleets.

The main concern with CNG is the behavior of the tank in case of fire. As you might know, members of a certain religious minority have been expressing their love of European society by setting cars and busses on fire. In a few well-publicized cases, these vehicles' CNG tank exploded spectacularly, maiming firemen in the process. The problem was fixed by fitting the tank with a safety pressure valve, mandatory in France since 2001.

So from a shock- and fire-resistance standpoint, newer CNG tanks are actually very safe.

Gary Jason

CNG has been used quite safely in this country for many years. In particular, many buses are fueled by it. And at current pricing, it is already only about half as costly as the equivalent amount of gasoline. If Obama or Israel goes to war against Iran, the price of natural gas will be a tiny fraction of the cost of an equivalent amount of gasoline.

What I emphasize is the security angle. We have 100-200 years of known reserves of natural gas in the U.S. even now, and we haven't permitted exploration of much of our extensive public lands and coastal shelf, nor have we explored our Arctic shelf. Nor have we done much to explore converting coal--of which we have 250 years worth of proven supply--into natural gas.

If we converted all our vehicles--cars, trucks, and buses--to CNG, we will be free from our current dependence on Middle East oil, so won't be as likely to get sucked into war there in the future.

Fred Mora

Gary,

You are right about CNG vehicles helping reduce dependency on foreign fuel shipments.

Please note that oil refined for vehicle fuel is only roughly half the oil used in the US, even a 100% CNG conversion will not totally free the country from foreign oil. But it would definitely be, as you say, a step in the right direction.

Gary Jason

Fred, you might want to look at the latest review of the United States estimated recoverable oil, nicely covered by John Merline of Investor's Business Daily. He notes that the Institute for Energy Research (at the Rand Corporation) now--in light of the latest technology--estimates our recoverable oil at 1.4 TRILLION barrels. That is enough domestic oil at current usage for 200 years.

So let's see: domestically, we have about 250 years of coal at current usage (and remember, we generate half our electricity from coal). We now have an estimated 100-200 years of natural gas at current usage. And we have about 200 years of oil at current usage. WITH NO IMPORTS.

And if we built the Keystone pipeline, we would have access to the massive reserves of oil in Canada's tar sands deposits.

If only the federal government would get out of the way, we wouldn't have to be in such a vulnerable state. That is all I am trying to say.

Rob McMillin

I am extremely skeptical that the oil shale will ever be commercially viable. The main reasons are

1) Its diffuseness. The problem with solar and wind is largely this. Oil shale compounds this problem by requiring a lot of material to be processed to acquire the end product.

2) It requires large volumes of water to process, a substance notably absent in the places oil shale exists in abundance.

Unless there is some sort of breakthrough technology, I do not see this as especially worthwhile discussing.

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