The gas situation, to me, is not as clear as Kunstler portrays it. I think there was a capital strike by the big oil companies re drilling for gas in the continental USA. Most of the on-going drilling is by the rest of the industry. The big oil companies are aware that the world is awash in gas in places were there is not market for it. Hence the attractiveness of a high enough price in the USA to make importing LNG profitable. We've been at and above that price for a couple of years. Proposals for LNG terminals in North America abound, though as Kunstler says, local opposition has stopped several already. In response, the Bush administration wants to have siting power reside in Washington, rather than the local or state agencies where the plants would actually be sited. At the moment there are major conflicts in Rhode Island, California, and elsewhere, including Baja California near San Diego. Recently it was reported that a new cartel of gas exporters is under construction. These mostly small nations are concerned that the enthusiasm for LNG plants will result in a few years of too much capacity, followed by falling prices.
My guess is that Cheney et al want gas prices high enough here so that LNG is financially feasible, to create a market for the gas already discovered abroad by their oil industry friends. This also fits nicely with their deep lobbying for new nukes, which seems to have paid off in converting big enviro groups to switch sides and be open to new construction (and subsidy) of nukes.
Gene Coyle
paul phillips wrote:
Re gas: From Kunstler, THE LONG EMERGENCY
"To aggravate matters, American natural-gas production is also declining, at five percent a year, despite frenetic new drilling, and with the potential of much steeper declines ahead. Because of the oil crises of the 1970s, the nuclear-plant disasters at Three Mile Island and Chernobyl and the acid-rain problem, the U.S. chose to make gas its first choice for electric-power generation. The result was that just about every power plant built after 1980 has to run on gas. Half the homes in America are heated with gas. To further complicate matters, gas isn't easy to import. Here in North America, it is distributed through a vast pipeline network. Gas imported from overseas would have to be compressed at minus-260 degrees Fahrenheit in pressurized tanker ships and unloaded (re-gasified) at special terminals, of which few exist in America. Moreover, the first attempts to site new terminals have met furious opposition because they are such ripe targets for terrorism."
Paul Phillips
Michael Perelman wrote:
Massimo suggests natural gas. I don't know how nat. gas supplies will hold up under a massive conversion to that fuel. I had not heard until recently about converting nat. gas to diesel. Nat. gas is a valuable feedstock for industrial use. I suspect that it has not been explored for as intensively as oil, so I have no idea when a Hubbert's peak would occur.
I am sure we have an expert here. -- Michael Perelman Economics Department California State University Chico, CA 95929
Tel. 530-898-5321 E-Mail michael at ecst.csuchico.edu
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