There is currently a maelstrom of news about costly failures in the so-called green energy industry. Of course, solar power is prominently featured, and the Solyndra fiasco is only one of the scandals. Rapidly rising to public consciousness is another crony capitalist solar company, SunPower, which looks like it too will go bust and cost the American taxpayer a fortune. Also in this club of losers are solar companies such as First Solar and Abengoa, both again the recipients of taxpayer dollars, thanks to the current administration’s rigid environmentalist ideological mindset.
But not to be overlooked are disappointments in the other segments of the green energy industry. Corn-based ethanol has proven to be such a wasteful boondoggle that even Al Gore has rethought his support of it. And wind power has come in for a good deal of scrutiny. Why, even geothermal companies are proving questionable. A recent report of three on the biggest such companies — Nevada Geothermal Power, Raser Technologies, and U.S. Geothermal — shows that they are all in financial difficulty or are just not profitable. All are recipients all of taxpayer loans or loan guarantees.
This has left the proponents of green power trying desperately to explain away its dismal failure — both here and abroad — to prove itself commercially viable without massive governmental subsidization, and without the corruption that governmental subsidies typically bring. But while we are witnessing the bursting of the Great Green Energy Bubble, we are also witnessing a renaissance of fossil fuels — the very fuels that Malthusian prophets of doom have for decades claimed are “running out.”
This renaissance has been caused by a technological revolution that is transforming oil and gas drilling. Because of it, oil and gas are far more plentiful here and in countries outside the Middle East and other hostile neighborhoods, such as Russia and Venezuela. I am thinking especially of two technologies, fracking and horizontal drilling. The rebirth of fossil fuel production was unimaginable a few years ago. It is completely beyond the ken of the Greens who constitute the Obama Regime, people who never anticipate revolutions that are not run from above, by them, but instead originate in the distributed intelligence of regular (read: creative) people.
We are also witnessing a renaissance of fossil fuels — the very fuels that Malthusian prophets of doom have for decades claimed are “running out.”
Start with fracking. It has certainly made some energy companies rich. For, example, Noble Energy has just paid a whopping $3.4 billion for a half-interest in the Marcellus Shale holdings of Consol Energy. Together they plan to develop a huge chunk of Pennsylvania and West Virginia (663,000 acres). Even after selling off half its holdings, Consol still expects to extract a massive 350 billion cubic feet of gas.
What is fascinating is that Conrol Energy is a Pennsylvania-based coal company — you know, one of those, well, fossils of the fossil fuel industry. It is nicely positioning itself for the inevitable shutting down of coal-fired power plants under the relentless pressure of the EPA. Consol and Noble are just two of the flood of companies moving in to develop the Marcellus Shale formation.
Fracking is also rewarding key players in the industry. Marcus Rowland, the CEO of the small but important player, Frac Tech International, earned a tidy $24.4 million last year. His compensation made him the highest paid CEO of any publicly-traded energy company. He is paid more than the CEO of IBM.
Frac Tech is beating many other energy companies by providing hydraulic fracturing services for big energy companies such as Chesapeake Energy and ExxonMobil. It brought in nearly $1.3 billion in revenues. In the world of fracking, only Halliburton and Schlumberger are bigger.
There is a very recent report about the development of a shale field of truly stupefying proportions. The Utica Shale deposit is an enormous geological formation stretching from Quebec to Kentucky. It may be an even more fertile source for oil and gas than the Marcellus Shale field. Ohio state geologists — a neutral source, please note — estimate that Ohio’s share of this field holds upwards of 15 trillion cubic feet of natural gas and 5.5 billion barrels of recoverable oil (or roughly a third of the production of America’s largest oil reserve, Alaska’s Prudhoe Bay).
Then there is brilliant article discussing one of the unsung creative geniuses of American industry, Harold Hamm. In a week dominated by paeans to the fallen Steve Jobs — who rightly deserved recognition for his amazing success in making Apple what it is — it was nice to see a piece on the remarkable Mr. Hamm.
Far from welcoming the renaissance of the American fossil fuel industry and the jobs it would provide, the Obama Regime has fought it tooth and nail.
Hamm is the founder and CEO of Continental Resources. He rose from humble origins — the thirteenth child of Oklahoma sharecroppers — to become thirty-third on the current Forbes list of wealthy Americans. Yes, Virginia, there is a Horatio Alger. Hamm is almost certainly going to rise to a much higher place on the list, given how much oil he owns.
He made his early success as a wildcatter with a keen sense of where oil could be found. But his greatest contribution was his early employment and improvement of a second innovative fossil fuel technology, a method called horizontal drilling. This is a technique whereby the drilling company drills downward (up to two miles deep), then drills outward, horizontally. This technology has — as dramatically as fracking — allowed energy companies to exploit petroleum and gas reserves hitherto not commercially viable.
Hamm is the discoverer of the famous Bakken oil field that extends from Montana to North Dakota. So fertile has this field proven that it has helped put America back in third place in the world in oil production. He estimates the reserves in Bakken alone at 24 billion barrels — which if true is double our currently proven national reserves. Continental has seen its proven reserves go from 118 million barrels in 2000 to 421 million barrels this year.
One might expect that the Obama Administration would be delighted at the prospects of America’s becoming energy independent — and potentially millions of American blue-collar workers getting high-paying jobs.
But one would be wrong.
Far from welcoming the renaissance of the American fossil fuel industry, the Obama Regime has fought it tooth and nail. It is attacking shale oil and gas with every tool at its disposal. Its Department of the Interior has undertaken a jihad against them. It has locked away from exploration and development vast new areas of the Midwest and has waged a war against conventional offshore drilling. It is now doing its best to stop the new technological drilling, even in lands that have been drilled conventionally before.
The Green Regime’s SEC has entered the fray, demanding that companies like Continental follow new Sarbanes-Oxley requirements about reporting royalty and production figures, meaning that CEOs like Hamm face jail time if some low-level operator misreports production from a field.
Ironically, the feds never apply Sarbanes-Oxley to themselves. If Obama or any of his administration misreports taxpayer liabilities, say, for solar industry loans, nobody faces any consequences.
In addition, the Regime is pushing de facto tax increases for the oil and gas industry, by ending various tax credits the oil industry has long enjoyed. This — coming from an administration lavish in its subsidies to minor and expensive energy sources such as solar, wind, geothermal, and ethanol — is from the point of view of physical science simply bizarre.
Finally, the Green Dream Team has brought its Justice Department into the jihad. It recently brought charges against seven oil companies in North Dakota for killing 28 birds. Continental has been accused of killing — one bird! But this is not a minor matter: the executives face six months in jail if convicted. (Note: The same Justice Department has never even once pursued any American wind power company, even though American wind power facilities kill on the order of half a million birds a year.)
But even as the Regime wages its jihad against domestic fossil fuel industries, other countries are moving ahead with the new fossil fuel technologies. As I noted in an earlier piece, Israel has set about using fracking to free itself from reliance on foreign sources of oil, which would mean changing the balance of power in the Middle East. Israel is using fracking to exploit some major fields, the most recent being a field (named “Leviathan”) which holds 16 trillion cubic feet of natural gas, or about a century’s worth of gas at Israel’s current usage. This field is only part of the massive Levant Basin shale field, which holds upwards of 122 trillion cubic feet of natural gas, or about eight centuries’ worth.
More recently, a small energy player in the UK has announced that the Bowland Shale field, in northwest England, contains an estimated 200 trillion cubic feet of natural gas. This estimate (by Cuadrilla Resources) means that this one shale field contains enough natural gas for two-thirds of a century of the UK’s needs at present levels. And that is only one field.
The British boom is being echoed elsewhere in Europe, where other countries are also turning to fracked gas — except France, which has outlawed shale gas exploration altogether, one suspects to protect its nuclear industry from competition. But Poland, for instance, has an estimated 187 trillion cubic feet of shale gas. This is geopolitically game-changing, considering that Poland now has to import its natural gas from neighboring Russia, a country that historically has kept trying to incorporate Poland into its empire.
Note the extremism of Banks’ demand: don’t even explore, much less try to use, resources until they are proven, to her ilk, to be perfectly safe—something that will never happen.
This discovery in the UK comes just in time to stop its increasing dependence on natural gas from the Middle East and Norway. But — naturally — the British energy suppliers are facing the same kneejerk environmentalist opposition that Hamm and other American suppliers do. Soi-disant environmentalists in Britain are roused in furious opposition. Jenny Banks, the “energy policy officer” for the environmentalist group WWF (World Wildlife Fund) demands, “The government should at the very least halt shale gas exploration in Britain until more research can be undertaken on both the climate-change impacts and contamination risks associated with shale gas.” Note the extremism of her demand: don’t even explore, much less try to use, resources until they are proven, to her ilk, to be perfectly safe—something that will never happen.
What explains this visceral hostility to a product the human race desperately needs, and the pushing of forms of energy that have proven time and again to be commercial losers?
The answer is that much of the environmentalist movement consists of two groups: neo-socialists, and neo-Romantic pagans. The former profess a love of the ecosystem but are really animated by a hatred of capitalism. These are the people who never uttered a peep about environmental degradation when the Soviet Empire was cheerfully despoiling the ecosystem, but who now wax furious at the thought that a capitalist — a capitalist — should even explore for oil. Should Vladimir Putin or Hugo Chavez start using fracking, why, instantly, fracking would be fine.
The second group, even more bizarre, is populated by those I have characterized elsewhere as self-loathing hominids, i.e., people who are ideologically misanthropic. They view their own species as vile and disgusting, literally a blight upon the planet. The thing they fear most is precisely the discovery of inexhaustible, inexpensive energy. They fear it because such energy would allow the human race to flourish, and these self-loathing hominids do not want the human race to flourish. To them, rats and roaches are wonderful, but children are not.
You simply can’t please these worshipers of Thanatos.
But the rest of us should rejoice in the renaissance of fossil fuels. Unlike the green energy sources that have done so pathetically little to help humanity, it holds the promise of inexpensive energy on which our continued prosperity depends.